Anyone that is serious about financial literacy needs to create a budget. Or they need to determine some other way to ensure they are living within their means and they are spending, investing, saving, and in general using their money wisely. Call it a budget or call it something else such as a spending plan; the point being that having some form of structure set up will help you meet your short as well as long term financial goals.
Studies show that only about ¼ of households use a budget. This in effect means that for every 100 households that try to start budgeting at some point in their life, about 70 to 80 of them eventually give up. The reasons vary, but they can include lack of time, knowledge, they do not see the value (or rewards) for doing it, it can be “exhausting” to log expenses and other factors. We do have some suggestions on how to create a budgeting, and more importantly, stick with the process.
How to make a budget and stick with it
Maybe the easiest, most effective way to both create a budget as well as to stick with it is to use technology. There are many tools, most of which are free to use as well as straightforward to learn. They can simplify the budgeting process by helping families track their income, spending, plan for the future and so much more.
Many of these free smartphone or android apps do just help with budgeting, but they can help with other financial literacy tasks such as investing, providing discounts or coupons, assist clients with building up their savings on an automatic basis, and more. Continue with using technology as well as free apps to save and budget.
Another way to stick with a budget is you need to see the results of it. The best way to do this is to pay yourself first. This means that each and every pay period you have, the first expense you budget for is to save money for yourself. Put your money into emergency savings, retirement, or a personal investment. Reward yourself for going to work everyday and living within a budget. Put this savings and investment on “auto-pilot”. Seeing the rewards of your diligence will probably more than anything else keep you focused on budgeting and gaining wealth. Find how to pay yourself first.
By Jon McNamara