Those who know me at KerberRose know how much I love to talk about a healthy budget. Creating a budget is easy. Most people would say forming a budget is not the problem; sticking to it is. Typically, when advisors use the word budget, clients get tense, because they feel a budget means to limit themselves. I want to help change this mindset. Budgets don’t restrict your spending; they give you the freedom to spend while still achieving your short and long-term financial goals.
How can we better equip ourselves to stick to our budgets?
1. Create a Realistic Budget
It may seem like a no-brainer; however, I see many people struggle because they create a budget for their desired income, not their actual income. This situation is even more prevalent now, as we live in a world where it is so easy to borrow money, swipe a credit card, and pay everything with “four easy installments.” As such, creating a realistic budget is becoming more of a challenge. When you generate your budget, I want you to use only your earned income, not the capacity of your credit card. Remember, you want to tell our money where to go, not wonder where it went.
2. Have An Accountability Partner
If you are married, your accountability partner is most likely your spouse. If you are single, I want you to find a close friend you trust to go over your budget. Just like with anything in life, doing this alongside someone is easier than doing it alone—and chances are, you will achieve more. The best part about doing this is when you feel like you have hit a bump in the road or are about to purchase outside your budget, you have someone to go to for guidance and to remind you of your financial goals. This also means you have someone to celebrate with you once you reach your financial milestones!
3. Stay Out of the Stores
If you are anything like me and tend to make many small impulse purchases, staying out of stores will only help you achieve your financial goals. With current developments, you don’t even need to go into the grocery store, which removes the temptation to impulse buy. Utilizing grocery pick-up has saved my family hundreds of dollars, as I always spend less when I avoid going into the store. Furthermore, this is a huge Mom win, because I also don’t have to haul four kids around the store.
4. Track Your Spending
Sticking to your budget means every time you make a purchase, you need to track it. Making a mental note of a purchase isn’t going to cut it. You must go back to wherever you keep your budget, whether it be your phone, computer or notepad, and write it down. It’s so easy to lose track of your purchases. As you can see, this advice is very important if you want to stick to your budget.
5. Keep a Buffer
I’m a huge advocate for ensuring you have a buffer category when creating your budget. This buffer is great for when unexpected expenses come up. Between birthday parties, paying more for gas than usual, or just your typical “fix it” run, having a buffer in your budget will help. In these ways, the unexpected won’t derail your budget, and you can stay on track with your financial goals. My family allocates $100 into the buffer category every month, and for us, it works! Can your “buffer” category be called “Occasional Starbucks Run,” too? I think so. 😉
6. Keep Your Goals Visible
Finally, to stick to your budget, you need daily reminders of why it’s essential to do so. When my husband and I were paying off our debt, we had a piece of paper with a bunch of boxes on our fridge. Every time we paid something off, our kids colored in a box. One day, when we saw there were more boxes colored in than not, it pushed us to keep going and stick to our budget. Having a visualization of your goals truly makes a difference. We are currently out of debt and have a “Fully Fund a Roth IRA” tracker on our fridge! These trackers also get our kids involved, as they are the ones typically coloring in the boxes. As a bonus, teaching children to have a healthy relationship with money is something for which I am a huge fan! If you’re looking for a pay-off tracker, please feel free to email me— I would be happy to send you one of our KerberRose-branded trackers.
Creating a budget is easy; sticking to it is the hard part. If you are struggling with this, I want to help! Feel free to contact me so we can talk about all things budgets. At KerberRose, we want you to achieve financial wellness, no matter your income!
About Alex
Alex is one of our financial wellness advocates on our Wealth Management team. She is a mom of four, and her passion is sharing her own personal finance journey from living paycheck to paycheck and drowning in debt to finding financial peace. Alex's unique experience has given her the ability to help families take control of their own personal finances - all while still enjoying what life has to offer.
Contact: alex.miller@kerberrose.com