If you are reading this post, it’s because you were intrigued by the title. If you were intrigued by the title, that means you are currently NOT sticking to your budget. It might even mean that you’ve never made one.
If you were intrigued by this post, that probably means you are currently questioning if your card is going to eventually get declined by the end of the week. That also means that you are probably living paycheck to paycheck… like 60% of Americans are.
The good news is, you are not alone in having financial questions. The bad news is, financial instability is a leading cause of anxiety and it can deplete your ability to do anything else in life. Have fun with friends? Not this weekend, it wasn’t payday on Friday.
I don’t want you to live like that – shoot, you probably don’t want you to live like that either. If you are young and either in school or just starting your career, you can still achieve financial freedom and learn how to create a budget and stick to it.
Related Book: How to Adult: Personal Finance for the Real World by Jake Cousineau
Remember, consistency is the key with finances. If you are consistently spending more money than you make, you will be broke… forever.
If you consistently make more money than you spend, you will eventually build up a stable base where you can begin investing and using your resources to make more money which will open your life to a ton of new opportunities.
- Create categories for your money and budget monthly.
You need to know exactly how much you are spending, and what you are spending your hard-earned money on. Budgeting monthly will not be extremely overwhelming and it will be easier to track as opposed to daily or weekly tracking.
Creating categories is easy: groceries, gas, rent, utilities, food/coffee, gym, etc. Create a google sheet or a document that can easily add all of your categories into a “total expenses” line. This will give you a solid visual, as well as a total for what you spend on a monthly basis.
This also makes it visible for you to see if you spend more than you make. If so, make some changes to your spending habits until they fall in line.
What changes, you may ask? Keep reading and find out.
- Budget for necessities FIRST.
I don’t know your specific life situation, but I am going to argue that the first two necessities for your budget is to give 10% and to save an additional 10%. The other necessities are some of the categories I listed above.
I know what you might be thinking – that’s like my whole budget! Where is the wiggle room to have any fun?
If you are that in the hole where you need to ask that question, I would reckon that it is even MORE important for you to save 10%. Giving 10% is a biblical principle that shows God that we recognize that he has given us resources as a gift, that we apart from him we can do nothing. If you are a blessing to others, God will bless you in return (not necessarily financially, but with abundant joy and peace in his presence).
After you budget for necessities, see how much room you have left. If you find yourself consistently overspending on miscellaneous things that pop up, readjust how you live.
Budgeting and saving money is crucial for your long-term health and success. Therefore, you might need to go through some minor inconveniences at the moment. Some changes that you could make include: getting a roommate (or two), stop by designer clothing and new trendy accessories, find items to buy and sell to increase your income, or fight to figure out another solution.
Budgeting is on you and there is no one coming to save you from your financial troubles. Either you learn how to save more or to make more, but either way, you must account for ALL necessities, including saving and being generous.
- Stick with it: Have your closest friend (or most trusted person) look at your budget each month.
I know that finances are extremely personal. However, accountability is the strongest solution to get you to stick to your new budget.
Related Book: Success Habits: Proven Principles for Greater Wealth, Health, and Happiness by Napoleon Hill
If your most trusted ally is fighting on your team and wants to see you become financially free, they should hold you accountable each month to whether or not you are sticking to your budget.
One piece of accountability, if you are really serious about saving money, is to challenge yourself with this person. For every month that you do not reach your budget (you spend more than you make), with the exception of very rare but extenuating circumstances, you will pay your friend a certain amount of money ($25, $50, even $100). If you set this in place, you will be way more motivated to stick to your budget.
After you get in the habit of budgeting, you will not need to do this anymore. Eventually, you will begin to see the results of your hard work to save money and stick to a budget and the process of seeing those results will become fun.
When you become financially free, you become curious about how you can get even more financially stable. You will look at more ways to save money and creative ideas on how to make more.
Getting started is always the hardest part of anything. Budgeting is no different. Start small and work your way towards little wins. Save $10 here and there – simply get in the habit of being conscious about where your money goes.
I promise you, if you follow these tips and create a sustainable budget for yourself, while still allowing enough room to enjoy yourself from time to time, you will be on the path to financial freedom and paid-off credit cards in no time.
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