Budget for the life you have. When you’re going through your budget and assigning spending categories, be realistic.
Don’t tell yourself you’ll never buy a single discretionary item, because you’re setting yourself up for failure. Give yourself some breathing room.
This becomes a problem when you’re spending for a life you can’t afford. It puts pressure on your budget and encourages you to live in a paycheck to paycheck cycle.
Assess your financial situation, cut back on your expenses, prioritize your money goals, and then come up with a new spending plan.
It’s hard to stick to a budget that doesn’t have a goal.
When there isn’t one, your budget becomes an afterthought rather than a spending plan to reach your financial goals.
If you keep blowing your budget because expenses “pop up” every month, you’re probably not budgeting for irregular expenses.
It’s a common budget problem with an easy fix: find those quarterly, annual, and other seemingly random expenses, and add them in.
It’s important to have an emergency fund. When your car breaks down, you have money to pull from, rather than screwing up your budget for the next few months until you get back on track.
It might take you some time and slow down your goal progress, but building an emergency fund will keep you from blowing your budget.
The Envelope system is a way to track your variable expenses like food, entertainment, and drinks.
This method, preferably used weekly, allocates a certain amount in each category in labeled envelopes (food, drinks, movies, etc.). Once the envelope is empty, you are done spending in that category.
In order to do this, you need to track your spending by either writing your purchases down or using a free personal finance app.