Next to a budget is something I’ve been doing for a long time. But it’s not always something I was good at.
You see, I have had a budget in place for many years. But in the past, I had a hard time sticking to it. And if you don’t stick to your budget, what’s the point of having one?
The good thing, however, is that I realized where I was going wrong and have since corrected it. And these days, my budget is much more specific for a big reason.
It is important to be realistic about spending
My budget lists all my monthly expenses, from my mortgage paying my cable and internet bills at the grocery store. It also includes line items for different types of savings – my emergency savings, my retirement plan, and my vacation fund, among others.
For a long time, I found myself going over budget on a regular basis. And when that happened, luckily I didn’t run up any debt, so I wasn’t that motivated to fix the problem. On the contrary, going over my budget meant having less money to invest in my savings account, retirement plan, etc. But since I was still contributing some money in those accounts, I didn’t push myself to make any changes.
But I changed my mind a few years ago and realized there was no sense in setting a budget that I couldn’t stick to. And also, I sought to achieve the specific savings goals I had set, even if they were somewhat aggressive. To achieve this, I had to make a big change to my budget: allocate more money to leisure expenses.
Before having children, and when they were very young, it was easier to be frugal in terms of leisure spending. Now, if I say no to recreational spending, that means telling my son we can’t go bowling with his friends or telling my daughters we can’t join their friends at the carnival. These are not easy things to do. In other words, it’s one thing for me to sacrifice something I want in order to spend less. But I can admit, it’s harder for me to say no to my kids.
So I decided to change my budget. I chose to allocate more money to hobbies and entertainment, and less money to other expenses, including home maintenance and prepared meals (like takeout and delivery).
Today, we spend more on hobbies, but we take care of some home maintenance projects ourselves (even if they’re time-consuming and not fun) because we know it frees up time. money for other things. And while we’re still ordering our share of take-out, we’ve reduced our expenses significantly from what we used to spend.
Make sure your budget serves you well
Since I’ve moved things around in my budget, I’ve found it easier to reach my savings goals. This does not mean that I meet with them every month, because sometimes surprise expenses arise. But today, my budget is much more realistic and easy to follow, which makes it more effective.
If you plan to use a budget to track your money, you need to make sure the numbers it contains are realistic. You could want to spending only $700 a month on groceries, but if it costs $800 to feed your family, that’s the number you have to work with. I learned this lesson after several years of having a budget that didn’t really serve me well, and a few simple changes made my budget actually useful.
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