It’s not that difficult to create a budget, what is hard is staying on budget.
One way to get closer to the goal of staying on budget is to track what you spend – but very few people have the discipline or time to track each and every expenditure. The good news is that you don’t need to.
The reality is that most people don’t overspend on everything, there are usually just a few items, let’s say clothing, or dining out, or travel, that bust the budget.
How to Monitor Your Budget Busters
Instead of tracking every single expense, monitor your budget busters. You know what they are. Perhaps you go to your favorite clothing boutique and can’t say no to the latest seasonal fashions, or, you find it impossible to browse a bookstore or Amazon without stocking up on the latest bestsellers. Doesn’t help that online shopping has made it all too easy to spend more money without any effort at all.
The things we overspend on are as individual as we are. Identifying the culprits is the first step to successfully staying within a budget.
The process is simple.
- Make a list of your budget busters – you know what they are.
- Tackle one at a time or if you are extra motivated and organized, all at once. (Most people have two or three budget busters).
- Track your spending on the culprits.
3 Ways to Keep Track of Your Spending
Then employ one of the following techniques to keep track of your spending:
- The envelope system: place the monthly budgeted amount into an envelope in cash. Label the envelopes “clothing cash”, “shoe-cash” or dinner-out cash” and stash them in your wallet. When the cash runs out, stop spending until the next month when you will refresh the cash. Extra bonus: your monthly credit card balances will drop.
- You may be thinking: “There is no way I’m going to carry that much cash around.” And of course, there are those airline miles to accrue! In that case, write down your budget busters in your day timer, or on a piece of paper that you post somewhere visible such as on your fridge or near your computer. After each purchase, subtract what you spent from your budget. When you have spent your allotment, stop spending until the next month.
- You gave up your day timer years ago and you lose every piece of paper you write on. Boot up your favorite financial tracking or document software – you can try PocketGuard or mint.com, and download transactions from your credit cards and checking accounts. Each month, log-in and see if you stayed within budget.
- Find a trusted advisor or friend that will “buddy-up” with you to help you stay on track. Accountability is a powerful motivator.
Try this tracking system for a few months and see how it works for you. I think you’ll find that it’s an excellent behavior modification tool. As an added bonus, you’ll become more aware of spending habits that aren’t in your best interest.
Do you want to manage your money (and life!) better?
If you want to think differently about the relationship between your spending, your values and your happiness, then sign up to get your FREE copy of The Happiness Spreadsheet.
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