Finding A Budget You'll Stick With: 9 Things to Look For
by Jane Chidester
This is the next installment in a series of articles about making budgeting a way of life. It's not the torture mechanism we've been trained to think it is, but rather a powerful method of gaining control, planning, communicating, and fulfilling your dreams. At the very least, a budget should allow you to find extra spending money in your paycheck every month!
In the last installment, I discussed the pros and cons of older budgeting systems, and the general features of the budget of the future. This time I'll specifically itemize the key features of a good budgeting system; one that will grow with you, frustrate you the least, and keep you in control of your money! The system should be fairly easy to run.
If it's too complicated, you'll give up on it quickly and end up with no system at all. Many budgeting systems require you to fill out dozens and dozens of forms, and/or keep meticulous records of every penny you spend. It doesn't have to be that complicated!
Your budgeting system should be able to be used as a communication tool with the other members of your household. Effective money management within a marriage or family is based on good communication. Your budgeting practices must support and facilitate the communication process.
Your budget should allow you to define your goals up front, and then act as an instrument panel to guide you to success. Beware of budgets that act like "rear-view mirrors", that only tell you what has happened to your money in the past. You want a proactive system that gives you the power of planning and control.
If you have a spouse, it should be very easy for either of you to understand and run the budget at any time. Even if one person is the "primary" bill-payer, there will be times when the significant other will have to run things. The hand-off should be effortless.
Your budget should be customizable. Our relationships with money are as individual as we are. Your budget should be a reflection of you and your needs, dreams, and goals.
There should be an element of fun to the budget. Fun or rewards built into your budget will keep it interesting and help keep you committed to it. Examples of fun elements are saving for a treat or vacation, or getting "refunds" of spending money back when you pay a check.
The budget should be based on organization, not penny-pinching. Too often, people fall into the trap of thinking that the only way to get ahead is to give up things. Organization is much more effective, and a necessary first step before you can judiciously decide what to give up, or before you can decide if you even need to make any sacrifices.
The system should easily and instantly let you know how much spending money you have. Between bills, regular payments, savings and investments, taxes, and all the other routine and not-so-routine assaults on your checkbook, it must be an easy matter to know exactly how much discretionary spending money you have at any time. This knowledge lets you take advantage of opportunities, react to emergencies, or perhaps just enjoy a comfortable evening out.
Your budgeting system should continually teach you what's going on rather than just blindly giving some "rules" to follow. The goal of any good budgeting system should be to impart understanding. Knowledge is power.
Next time: 3 Myths of Budgeting; The Misunderstood Miracle
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save! or No, debt is not a problem but I am trying to get ahead financially!
Jane Chidester is the author of BudgetYes! 21st Century Solutions for Taking Control of Your Money Now!
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