2 November 2018
Setting a budget is easy. Sticking to it isn’t. The weekend, for example, is a bad time for any budget. One or two dinners or a shopping spree can ruin a perfect budget.
We’ve put together some simple and practical tips to keep you on budget.
① Don’t be too starry eyed. Your budget is more likely to succeed if it’s realistic. A practical start is to look at your income and spend over the last three months. Create your budget based on that information. If you’re spending more than you’re earning, then your budget will serve as a remedial action plan. If you’re approaching it proactively, a budget will enable you to plan and save better.
② Beat your behaviour. If you’re serious about sticking to your budget, identify typical spend ‘triggers’. For example, if you spend R500 a month on take-away cappuccinos on the way to work, make sure you fill your travel mug with coffee before you leave the house. If you can’t keep track of miscellaneous expenses, draw a set amount of ‘pocket money’ at the ATM every month – when it’s finished, it’s finished.
③ Build in some ‘happy’. Your budget shouldn’t just be about planning monthly expenses, like transport, fuel and groceries etc. Make provision for holidays, clothes and hobbies. Most of us skip the “fun stuff” or great travel experiences simply because we don’t plan for it. A generous reward now and then is a great way to stay motivated.
④ Own it! Find a budgeting method that suits you, your unique lifestyle and personality. Some of us prefer a pencil and notebook, others a digital tool. Often couples will work on a budget together. Whatever method you choose, it must work for you. If you schedule time at the start or end of the month to work out a budget, it will become a good habit.
⑤ Keep an eye on the future. The concept of a budget is not to get to the end of the month without exhausting your credit card. At the core, it’s about saving for the things you really want and investing in a better future. When you have a strong personal goal in mind, you’ll be committed to sticking to a budget. Always “Pay” yourself first – put something away for savings before you tackle any other budget item.
⑥ Cut yourself some slack. If your budget doesn’t work out this month, that doesn’t mean you have to abandon the concept altogether. Be flexible. Adjust as you go. Sometimes we forget to budget for ‘hidden’ expenses, like taxes, ad hoc home repairs or supplies for a home office. A good tip is to reconcile your expenses when you do your annual SARS tax returns – this will give you the year’s income and expenses retrospectively.