I used to cringe at the mere mention of budgeting. As far as I knew having a budget meant filling out a spreadsheet -- and that was something I'd tried but couldn't seem to sustain.
This post originally appeared on ReadyForZero.
As far as my own budgeting strategy went, I knew vaguely what I was paying for groceries, exactly what I was paying for rent and utilities and the rest was split between what felt right in my savings or my extracurricular spending.
But life inevitably became more complicated. I started thinking about retirement contributions, an emergency fund and even investing. There were loan costs and insurance costs to deal with. Though I had some money left over every month after my expenses were covered, I couldn't confidently say exactly how much. The problem, of course, with not knowing exactly how much I was spending was that I couldn't see exactly how much I was wasting. With no clarity in my spending, my overall financial picture was blurry. It became fairly obvious that yes, I needed a budget.
I already knew the spreadsheet method alone wasn't going to work for me, but I also had to admit that budgeting in some form was going to be the key. So instead of fighting the upstream budget battle, I started to look at how I might form a long-term budgeting strategy using knowledge I already had. With that in mind, I took the things that worked for me, and I improved and expanded on them.
Before getting into the nitty gritty details of a budget, it's important to realise that not all budgets work for everyone. That's no reason to give up though! Budget planning can benefit from careful consideration of all variables involved -- including your unique perspective and personal strengths. Your finances are personalised and your budgeting strategy will be too. Here are some ways to go about discovering what budgeting techniques will help you to manage your finances most effectively:
Assess Your Financial Strengths and Put Them Into Action
When I realised just how many budgeting strategies there were to try out, I decided to focus on how I might be able to fit in some of my personal strengths.
For instance, I usually put a lot of momentum behind a project in the beginning so I wanted to find a budgeting technique that was easy to implement. I'm also most productive when I first wake up, and more likely to finish problems if I make them a part of my daily ritual. These may seem like small things, but can actually be incredibly effective when put to good use.
What time are you most productive? Do you work better alone or with someone else? Are you more successful with "a little every day" or "a lot all at once" strategies. Basically, look at where you can easily see yourself bettering your budget. Everyone has their sweet spot for productivity, and strengths that support it. What you find to be lesss challenging is just as important to consider as what you do find challenging.
Pinpoint Your Biggest Financial Weaknesses and Give Them Extra Attention and TLC
As mentioned above, I found spreadsheet based budget-tracking to be difficult so I tried to pinpoint why exactly. First, I narrowed it down to three general "weaknesses":
- Distraction: I'd inevitably become distracted, too busy, or simply bored with the number input.
- Frequency of mistakes: I'd forget to save a receipt which resulted in holes of "mystery spending" in the budget.
- Negative emotional response: I became discouraged and fed up when faced with the above spending holes.
Next, I looked at ways to address these personal weaknesses and develop useful ways to combat them. I personally find looking at only numbers to be less motivating and so I find it harder to focus on spreadsheets. So I started using charts and graphs to visualise the breakdown. This led me to be less discouraged with my progress. I started taking photos of my receipts with my phone so that I wouldn't lose them. Essentially, I improvised on the things I found to be most challenging about budgeting, and worked to create a structure to solve them.
If you're struggling with a budget, it can be extremely helpful to look at the specifics that are making it difficult. Those are the areas that could likely use a little bit of adjustment or attention.
Look at Your Greatest Personal Motivators
If asked to draw conclusions about myself, I might say that I'm more on the artsy side of the spectrum. I love words, writing and reading. So when it came to motivators in my budgeting plan I looked at how I could incorporate my natural inclinations with my budgeting techniques.
I found that I often lost interest when I wasn't inspired. To overcome the apathy, that meant taking time to read budgeting articles when I was feeling lackluster and seeking inspiration from other people's written success stories.
Aligning some of your natural interests with your goals can actually be a great way to work them into your lifestyle. Are you motivated by seeing the actual transfer of cash, or by balanced numbers on a page? Regular visual reminders of successes, or the feeling you have after you've reached an earned longer-term goals? Try and find some easy motivators to help regularly inject energy into your budgeting plan. It can be extremely useful in sustaining a budget long term.
And last but not least...
Keep your learning style in mind
"One size does not fit all" is a pretty valuable phrase to keep in mind -- particularly when it comes to creating your budgeting strategy. Some people are more visual than others and some people respond more strongly to auditory cues. Learning styles are a great place to look when you're looking to explore or incorporate a personalised strategy into your long-term budgeting plan:
You learn best by visualising things. You might find graphs or charts useful when breaking down your spending.
You find music or sound a beneficial aid to learning. You could consider setting specialised tones along with budgeting reminders on your phone, or creating a specialised playlist you put on in the background every time you balance your budget.
Sense of touch or physical movement is important. Envelope saving, where you can see and touch exactly where your money or savings are being put could be powerful.
Logical thinking or reasoning helps you to learn best. Luckily for you, a lot of financial advice is structured around this kind of learning. Spreadsheets, number crunching tactics and 'bigger financial picture' approach could add strength to your budget.
Learning in a group setting is powerful for a social learner. Having an accountability buddy might be useful and inspire you to stick more closely to your budget!
Everyone has their own style and their own set of experiences and preferences. I wasn't a spreadsheet budgeter -- but that's not to say you won't find them helpful. But sticking to a budget that doesn't fit with your lifestyle is incredibly difficult to stick with! Try out different techniques, adjust and readjust every few weeks or months. As you find your preferred budgeting style, it will become easier to make it a part of your regular routine.
Finding Your Best Budgeting Strategy -- and Sticking With It [ReadyForZero]
Claire is a Content Intern at ReadyForZero. She's a Bay Area native with an affinity for travel and food who enjoys writing about personal finance and many other topics.
Illustration by Nick Criscuolo.