If Following a Budget Is Hard, Do This Instead
Hey there! Are you one of the millions of Americans who made a resolution to get control of your finances this year? If so, you’ve probably been trying to stick to a budget. This is a great goal to have, but it may not be ideal for everyone. For example, if your paycheck varies a bit from week to week or month to month, setting a budget might actually be harmful rather than beneficial. There may be some pay periods when you simply can’t stick to the budget you established for yourself. If this happens, it’s a recipe for failure and you’re likely to give up on your resolution altogether.
That’s the last thing I want to happen for you, so I have developed a few suggestions for you. If following a budget is too hard, don’t give up entirely on your financial goals. Instead, try one or more of these money-managing approaches.
Put Money in Savings First
Before you do anything else with your paycheck, put money aside in savings first. Otherwise, you’ll probably find other places for it to go and you’ll never be able to build up that cushion of financial protection that’s so important to have.
If you have a hard time putting money in savings, think about it this way. Every time you save money, you’re paying yourself. You would never think of hiring someone to work for you and then sending them away without pay. So why should you work so hard to earn a living without paying yourself?
A good rule of thumb is to put aside a certain percentage of your paycheck. If you don’t have much money to spare, don’t worry. Try putting just 5% in savings to start. When you get in a more favorable financial position, you can start putting away more. But something is always better than nothing.
Eliminate Unnecessary Expenses
If you’re deep in debt and you’re trying to work your way out of it, one of the simplest ways to reach your goal is by eliminating unnecessary expenses. Though it’s simple, that doesn’t mean it’s easy. In fact, this is one of the most difficult things you’ll likely do for the sake of your financial future. There is no denying its effectiveness, though.
To start eliminating unnecessary expenses, write down everything you spend money on from month to month. I mean everything. Write down your monthly expenses (such as your mortgage or rent, gym membership, transportation costs and any fancy television subscriptions you may have). This step may take a lot of time, but the good news is that you only have to do it once.
Once you have a list of all your expense in front of you, it’s time to ask a hard question. Which expenses are necessary and which are not? Can you get rid of your monthly gym payment for a while and work out at home? Can you ditch your satellite television stations and watch only free stations for a while? Once you decide what expenses are unnecessary, follow through and eliminate them. When you’re in a better financial situation, you can consider adding them back again.
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Track Your Spending
Instead of budgeting which can make you feel trapped, try tracking your spending. Write down everything you spend money on, then review your spending habits at the end of the month. You may be surprised to see how much of your money is going toward completely unnecessary things. By simply being aware of your spending habits, you can make informed purchasing decisions that will help you save money going forward.
Being responsible with your money doesn’t have to feel restrictive. As a matter of fact, adopting responsible spending and saving habits can feel very freeing. Give these methods a try today and let me know how they work out for you.