We discussed how to set up a budget in a previous article, and I have spoken to a lot of people who say that sticking to a budget is really difficult. It is advisable to read our quick and easy way to set up a budget before you read this article.

And yes sticking to a budget is difficult because things change all the time and there are always unplanned expenses which you have to build into a budget, normally where there is not a lot of extra money to just take out and pay.

So your budget is set up and you included all your income and expenses as accurately as you can.

Now you decide upfront how much you will be spending on each item next month, there is no point in treating your budget like a rear view mirror and seeing where you went wrong last month.  Your budget is an ongoing document, so if one of the kids loses their jersey in the middle of winter, you can check and see if there is money in the budget, if there’s not enough money allowed for clothing, then what you will cut to be able to afford it.  It’s very important to keep the numbers at the bottom the same even if there are unexpected expenses, because either you will go into the red if you don’t, or something like your savings plans for the December holiday will be affected.

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Are there ways that you have seen other people use, which make it easier not to make mistakes when working with your budget?

There are some ways that I have seen people use, and there are many different ones.

Keep the savings separate from the household money and set up a stop order to transfer the money to the savings account on payday.

Separate the money for necessities that you use through the month, like money for petrol and food, your money for bread and milk etc, and even open a separate cheap bank account with a debit card.

If you have debt, get rid of that as soon as possible, allocate extra money to the debt.  This will free up cash when they are paid up for savings and long term plans.

What is the difference between someone who makes a success with their budget and someone who just struggles on or gives up on the budget idea?

Ask for help if something doesn’t make sense, speak to friends and family about ways they reduce costs.

Equally important is your mental attitude.  You have to see the benefits and even if it takes a while, done properly the benefits will show.  Many valuable things in life take time.

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Being in control of your finances and knowing that you will not run out of something or have to take loans or use credit cards to fund your lifestyle is a confidence-building feeling.  Saving for something you and your family want or need, and achieving that goal is very satisfying.  Involving your family in the decision making and goal achieving makes it even better because you are teaching others how money works, and how to work with money.

If you need help with setting up a budget, or struggling to stick to your budget, contact RD Debt Counselling and let us help you today.