Rather than a constraining device, building a budget can give you the financial freedom many wish they had. Building a budget can change the way you think about money by shifting your mindset from scarcity to abundance. Shifting your mindset requires patience and dedication to your budget. A few ways you can keep on track with your budget is by setting aside “fun” money, getting specific with your spending, and planning for your future.
Build Fun In
Religiously sticking to a budget is not easy, especially when you see a cute item in the store. It is important to reward yourself for your hard work of sticking to a budget. According to Be The Budget, within your budget, you should have “fun” money which can be used for date night or to purchase that cute item. This portion of your budget should be a small but consistent percentage of your monthly income. Setting money aside for spontaneity will make your budget not feel restrictive and will increase the likelihood that you stick to it.
Get Specific
When creating a budget, it is important that you get specific with the allocation of your money. Estimates for incurred costs and generalized income will not help you reach your financial goals. Instead, break spending into categories. As Assisted Living Center points out, if you only look at the monthly view and not a weekly view, you may miss out on spending patterns you have. Look at your income and expenses with a detailed perspective so you are not caught off guard when the bills are due.
Plan for Your Future
Part of budgeting includes establishing a plan. Are there any upcoming expenses or life events that you need to be saving for? If you have student loans or other sources of debt, what is the interest rate and when are the payments due? Set aside money each month to cover these kinds of expenses. Your ability to purchase a car, home, go on a vacation, etc. is determined by your ability to plan for your future. Keep your eye on the prize by working towards financial freedom.
When you keep track of your money, you are aware of exactly how much you have and where it is going. This enabling power gives you confidence in your ability to control your expenses and financial freedom. Keep on track with your budget by setting aside “fun” money, getting specific with allocation, and planning for the future.
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