Living within a budget

A budget shows how much income is coming in, and how much is going out on spending. That makes your budget a great tool to manage your money without having to rely on debt.
 
The trouble is, we’re constantly being tempted to spend – and that can mean blowing even the best-planned budget.
 
Four steps can make living within a budget and managing your money a lot easier.

 
1 - Know exactly where your money goes
 
When it comes to budgeting, the “fake it til you make it” approach isn’t going to work. The only way to rein in spending and maintain an accurate budget is by understanding exactly where your money goes.
 
Keep a spending diary for a couple of weeks or use a money tracking app to get a clear picture of where your coin is going.

 
2 - Allow for some fun
 
If your budget is too strict, chances are you won’t stick with it for very long. So allow for some fun.
 
That doesn’t mean keeping up with the Joneses or splurging regularly. Rather, it’s about making adequate room in your budget for lifestyle and leisure, and the things that make life enjoyable.

 
3 - Look for ways to cut back without too much pain
 
One of the benefits of using a budget is that it can highlight areas where you can save.
 
If your budget shows you’re burning cash on things like dining out, try having friends over for a more affordable pizza night.  Look for ways to cut regular bills too – check to see if you’re getting the best deal on your phone plan for instance. Even small savings can quickly add up.

 
4 - Ask yourself if you really need it

Impulse buys and YOLO purchases may feel good at the time. But it’s likely the thrill will soon wear off, leaving you lumbered with the cost (and an unwanted case of the guilts).

So make a habit of taking a breather whenever you’re tempted to make an unplanned purchase.
Ask yourself if you really need the item. Even if it’s in your price range, walk away and plan to come back later. Just give yourself the opportunity to pass over a purchase you could regret later on.

Follow these strategies to avoid budget burnout – and remember, if you blow the budget occasionally, it’s not the end of the world. Just be prepared to fine-tune spending elsewhere until your budget is back in the black.