Whether it is for your business or your personal life you should always follow a budget. Even if you make significant amounts of money you should still have a budget. But before you begin making a budget you need to have a set of goals.
Do you want to be debt free, live on one income, or save for retirement? Make this into your personal or family financial mission statement. Write it down or type it up nicely and then have it laminated and display it in a prominent place where you can see it often. Many times we just need a reminder to ourselves for why we are doing a particular thing, and that can be just enough incentive when things get tough.
Set small range goals so you can see progress. It can be very difficult to keep up the discipline necessary to stay on budget if you can’t see any measurable progress. Develop some short-term goals that you can celebrate meeting. If your goal has been to reduce your grocery spending by $100 per month, then your weekly goal would be to cut grocery costs by $25. Likewise, if your goal is to pay off debt, make a chart to show how much you’ve paid off. Reward charts just aren’t for children! Use a type of chart where you can color in a bar to show your progress, and then color it in every time you make a payment so you can see the progress you are making. Put it up on your refrigerator or bathroom mirror as a reminder that your hard work is paying off!
Next, Identify your weak spots and develop a plan to battle them. In sticking to your budget, you need a clear idea of where you may be tempted to break the budget. If you are prone to impulse spending, then you must remove that temptation from yourself. If you go window shopping, leave your credit cards at home! Especially in the early days of sticking to your budget, it is important to re-train yourself to curb spending.
A good way to prevent yourself from digging yourself further and further into debt is to form a personal budget that can work for you. Many people spend their hard earned money frivolously without having many regards to how much money they will have left before their next paycheck comes. They will often find themselves having no money left and ending up having to borrow from a lender just to pay essential bills or provide for their family. The problem with this type of spending is that you tend to incur debts that will begin to cause added problems with your finances that you become unable to pay off your debts when needed.
If you would like some help with your mindset surrounding money check out my 10 Minute Money Makeover!