Three Tips To Help Stick To Your Budget
According to the New York Fed Center for Microeconomic Data, “Household debt continues to rise despite decline in credit card balances.” They are still trying to grasp the impact the coronavirus may be having on these trends, but one thing is clear: debt is ubiquitous and isn’t going anywhere anytime soon.
If you find yourself in debt, you know that one of the starting points for getting back out of it is to live according to a budget. You already know that the goal of a budget is to help you spend within your means. But how do you stick to a budget once it’s created?
One way of setting yourself up for success is by being realistic in all aspects of the budgeting lifestyle. Here are three ways to stay realistic to stay on track and stick with your budget.
Spending
When creating your budget, it must reflect your accurate spending. It can be very tempting to make a budget based on the consumer you’d “like” to be. Don’t do this. Don’t assume you can start spending less on your weekly coffee and then make an “idealized” budget. That will only set you up for potential failure and disappointment. Changes in spending will come in time. What’s important right now is acknowledging and accepting who you are and where you spend your money.
Forming A Budget
Part of sticking with a budget is tracking your spending. That means you need to periodically check your budget and add in your income and expenditures. You have the option to do this every day, or once a week, or once a month (preferably at the end of the month). No matter the frequency you choose, the important thing is to know that this added task will create a slight change in your routine. A 2009 study published in the European Journal of Social Psychology found that the time it took participants to form a habit “ranged from 18 to 254 days.” Knowing the variation and timing in advance will help you stay the course for a longer period of time.
Time
Many of us start living according to a budget to achieve a greater goal. These goals include paying off debts, saving for large purchases, and saving for retirement. Achieving these goals takes time. In 2018, CNBC reported that “The typical American household needs about 13 months to pay down the average debt of $8,195.” It is better to make smaller, realistic goals that will lead to your end goal than solely focusing on that end goal. In the case of paying off debt, it’s best to set up small, monthly goals. Then you can celebrate and rejuvenate your motivation monthly, rather than slugging it out for over a year before you can feel victorious!
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