Sticking to a budget does not have to be a painful process. It really is a method of goal setting, which is not such a bad thing. The key is to set realistic objectives that fall within staggered periods throughout one’s life. Budgeting in this fashion will make the entire idea seem less overwhelming.
When establishing a budget, it is important to set an overall goal regarding how much money will be needed in retirement. However, this point is so far into the future for most people, it becomes difficult to imagine arriving there. Therefore, set some short-term milestones throughout the years. Try to save a certain amount of money each month and deposit into an interest-bearing account to save for a new car, vacation, or home.
Budgeting also involves minimizing expenses, so try doing just that. If $200 was spent on groceries last month, try spending $150 next month by using coupons and only buying items that are on sale. Reduce money spent on items such as eating out. Eliminate those expenses that are not necessary, like purchasing unneeded clothing just because it is prominently displayed in the store.
Keep detailed records of income and expenses in order to get an accurate picture of both. Those who are not good at saving receipts should use credit and debit cards because they will receive statements for purchases made with each. The key when using these cards is to treat them like cash and not buy more than one can afford to spend.
The budgeting process is all about goal setting, something we do in our daily lives. Small goals include things like reducing the monthly dining expenses. Larger goals include planning for retirement, buying a home, or getting out of debt. Whatever the case, develop realistic goals, then track income and expenses in order to assess when goals are achieved. Adjust the budget only when necessary and celebrate small victories with little treats.