When the time comes for someone to decide to start saving money, creating a budget is usually the first step.
A budget is a way to set goals and prioritization of your money habits to understand what needs to change to ensure you keep to that budget.
In some cases, these changes can involve shifting the way you spend, while others look to help you focus on what you need, and others look to long-term savings.
What you fail to consider is that you are already taking the correct steps to save and budget.
Unfortunately you are making small mistakes that are keeping you from succeeding.
Fortunately, with these 7 tips to ensure you meet your budget goals, you won’t have to worry about sabotaging your financial plans.
7 Tips to Ensure You Meet Your Budget Goals
1. Long-term vs. Short-term Budgeting
When it comes to managing money, it is natural to do so in monthly increments.
You might do this because most of your expenses take the form of monthly payments – rent, bills, credit cards.
Try creating budget and goals that focus on a year.
You will be more likely to plan for unexpected expenses, and it helps lower the feeling of failure when you miss monthly budget goals.
2. Share Your Goals with Friends and Family
Everyone enjoys going out with a friend or family member.
The problem is, these individuals may not have the same goals as you.
And, therefore, you end up spending when you should be saving.
Share your goals and make sure people around you know you have a plan.
That way, you feel confident when the need to turn down an offer arises.
They may also offer tips and opportunities to help you meet your goals as well.
3. Managing Debt; Not all Debt is Bad
Having debt is not always a bad thing, as long as you manage it correctly.
Though you may not need to go into debt today, make sure to keep your long-term goals in mind.
Do you plan to go back to school to hone your skills or have plans to buy your first home?
Carrying debt that you can financially pay off will help you build the credit you need to keep your interest fees on future loans low.
In the end, this will help keep monthly payments at a manageable level.
4. Invest for Retirement
Take advantage of any opportunity to save for the future.
Savings for a stable retirement is becoming harder to reach each year.
This is why it is crucial to begin saving for today.
You may feel that you need the money now, but not taking advantage of company 401(k) or other options that earn you free money is a step backward when looking long-term to your future retirement.
5. Start Earning Money on the Side
There are probably several skills that you offer that you give away for free every day.
Earning an extra couple hundred dollars a month will help you meet your long-term goals.
Try looking for opportunities to apply these skills (speak another language, math tutor) by checking out the service section on job boards such as Craigslist.
6. Always Plan to Owe for Tax Season
Too often, I see people rely on their tax returns to pay off debt or cover bills.
Make sure to check at the beginning of the year or whenever you have a life-changing event (i.e., Getting Married) to ensure you are paying the right amount of taxes.
If you are someone who does earn money outside of their regular day-to-day job, plan on owing, as you probably haven’t paid taxes on that income yet.
7. Reward Yourself
While some of these tips may force you to change your money habits, never forget to reward yourself.
I am a firm believer in enjoying life, and treating yourselves once a month, will not only keep you from becoming discouraged but also give you a chance to have fun with the money you have saved.
Moderation is the key.
You don’t want to waste your present away trying to save for the future, but you also don’t want to jeopardize your future due to excessive spending now.
Which of these 7 tips to ensure you meet your budget goals are you trying out first?
Alex Matjanec is the co-founder of www.mybanktracker.com, an easy-to-use web portal that lets consumers rate and review banks, compare interest rates and learn more about the savings and investment options to best meet their goals.
[ Updated – November 2, 2020 ]