3 Keys to a Successful Budget


This is a guest post by Kali Hawlk

Have you tried to get your finances straightened out with a budget, but found that you’ve failed each time you’ve tried? Don’t despair! Setting a realistic budget that you can stick to for months, even years, isn’t a simple task (though it is well worth taking the time and effort to keep trying).

If you’ve found that keeping track of your money on a regular basis is difficult, it may be that you’re simply missing a few key elements. In order to create and maintain a successful budget, you need to have these three fundamental factors on your side:

Choose a Budgeting Tool That Works for You

There are so many different options when it comes to creating and using a budget today. You can use cash-only systems with a pre-allocated amount put into sets of envelopes. If you love not having papers to shuffle, you have the choice of going 100% electronic and automated by using a service that tracks your spending for you. Or you might have witnessed your parents or grandparents sitting down on occasion with a pile of receipts and a check register in front of them and watched as they balanced their checkbooks, and you’ve found you like doing the same.

Everyone is different; we all think about money differently, we learn differently, and we are motivated in different ways. Finding the method of budgeting that you feel comfortable with and can keep up with is what is most important. If it makes sense to you, run with it. Feel free to try and experiment with different systems and programs. When you find what makes sense to you, you’ll know you’ve found the tool that will help you create and maintain a successful budget.

Expect the Unexpected

In order to have a successful budget, you need to prepare yourself for everything. You’ll have a set of fixed bills to budget for, like your rent and your grocery bill. But life happens – and it usually happens in a way that costs a whole lot of money.

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From car breakdowns to accidents involving having your arm braced in the emergency room, these incidents can seriously blow a hole through your budget if you’re not prepared for them. So include a category for emergency spending, illnesses, and the unexpected in your budget. This way, you’ll be able to pay for a new pair of dress pants when you spill coffee on your other pair without completely throwing the rest of your carefully planned expenditures off track.

If nothing goes awry this month, you can either roll the amount you budgeted over into next month’s when-it-rains-it-pours fund, or you can take that money and tack it on as extra to that month’s debt payment. Either way, it’s a win-win: you are capable of covering any little mini-emergency that pops up, or you get to chip away that much more from your debt.

Patience and Motivation

Operating on a budget is a great tool to use to help you build wealth – but you won’t see a sudden surplus of cash overnight. So be patient and stick with your budget even when you get frustrated or have a month where an unexpected bill pops up and throws a wrench in your plans.

Within a few months of beginning to carefully budget, you should find that you end up in the red less and less. Eventually, you’ll be able to come back to your system and take a critical look at your cash flow in and out and find where you could make more cuts to expenses. Those cuts turn into money you can put toward paying off debt.

You’ll also need a lot of motivation. You need to be excited about your budget and eager to make it a success, and to keep that up 24/7, it helps if you have something that keeps your motivated and inspired. So track every little bit of your progress and celebrate milestones as your reach them. Make budgeting (and finding extra savings) a game and have fun with it. Set goals – both big and small – so that you have something very tangible to work toward with your budget.

It takes a bit of time and effort to turn into a habit, but once you get the hang of it, a budget should help you take control of your finances so that you can pay down debt, add to your savings, and build wealth. Once you discover what kind of budgeting system makes the most sense to you, learn to expect the unexpected, and maintain some patience with yourself along with a big dose of motivation, you should be well on your way to keeping a successful budget!

Kali Hawlk is the creator of her own excellent blog called Common Sense Millenial where she writes about a wide range of personal finance topics. You can also find her on Twitter@CSMillennial.

Image Credit: Rob

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