Budgeting is (for most people) a concept far easier said than done. Setting a budget is one thing, but sticking to it can feel tedious and limiting.
The snag is, building and following a budget serves as the foundation of solid family financial planning. If you know you should do it but haven’t had much luck in the past, the question remains:
How do I build a budget I’ll actually stick to?
Thankfully, the answer lies ahead. Here are a few tips, tricks, and secrets to help your family build (and stick to) your budget.
First, Here’s Why Consistent Budgeting Is Hard
Around two-thirds of Americans do not build a budget (according to Gallup). With the way we traditionally think about budgeting, it’s not hard to imagine why. The name alone – budget – can feel taboo. It can easily slip into guilt, resentment, dread, you name it, territory.
Focusing on a budget may feel similar to starting a new diet. While it’s doable for a short while, eventually, you hyper-fixate on the things you can’t have. In the end, the overwhelming feeling of deprivation can create an undesirable result like overspending or abandonment of the budget altogether.
All of this is not to say budgets don’t work. In fact, it’s a valuable tool for reaching short- and long-term financial goals. Instead, it’s the traditional approach to budgeting that can create friction. That’s why a shift in strategy can make all the difference.
4 Fresh Ways to Approach Your Budget
Here are a couple of techniques to try when developing (and sticking to) a budget.
Conscious Cash Flow Planning
Avoid getting bogged down in the details of your day-to-day spending by focusing on your finance’s big picture. At the end of the day, you need to know how much money is coming in versus how much money is going out. Knowing the numbers at a high level is an empowering tool for combatting anxiety surrounding your family’s finances.
Today’s options to track your money go beyond pen and paper. We suggest giving a few different methods a try and seeing what resonates best with your family.
A few options include:
- Mobile apps or software (like YNAB)
- Spreadsheets (printed or online)
- Bullet journaling
In addition, your bank may offer a money tracking feature within its app or website.
Intentionality & Purpose
You put intention into the decisions you make every day. You’re thoughtful about things like what you eat, when to workout, what you wear, or where you buy groceries. But when it comes to your money, are you being intentional with your spending and saving?
Giving your money a specific purpose creates intentionality. Doing so reveals the “why” behind your decisions, an important component of working towards your long-term goals.
For example, say you’re looking to save for college. Which of these scenarios creates purpose and intentionality?
I’m going to put $500 into an investment account every month.
I’m going to invest $500 into a 529 plan each month to help pay for my child’s education, to have $50,000 saved by the time they turn 18.
Scenario B provides a specific purpose for your investments. Having this purpose can make it easier to understand and stick to your savings goal over the long run.
Patience & Realistic Expectations
Remember how we compared budgeting to dieting? Say you’ve decided to give up sweets for a week. You’re doing good Monday and Tuesday, but by Wednesday, the cravings are kicking in. You can’t resist and sit down to enjoy some ice cream. Well, now that you’ve broken your no sweets rule, you might as well forget about it at this point – right?
The idea that we have enough willpower to restrict certain things entirely is unrealistic, and it can be detrimental to sticking to a budget.
Instead of restricting your spending altogether, look for areas where you can strike a healthy balance between modest spending and occasional splurging. Don’t give up at the first sign of overspending; there’s a learning curve to following a budget, and nobody’s perfect all the time.
Developing a realistic and forgiving budget from the onset can help combat the urge to abandon it at the first sign of trouble. If you know you like to gift generously during the holidays, include that additional spending in your budget. This way, you won’t feel like you’ve failed or gotten off track when December rolls around.
Similar to the idea of intentionality, setting a goal is an essential component of mastering the art of budgeting. If you don’t have a purpose for setting aside savings each month, then what’s motivating you to do so?
Having a goal helps your brain recognize and prioritize short-term wants with long-term goals. A goal is like a light at the end of the tunnel, the prize for developing and sticking to your budget for all this time. You need that reward to help make the process worth it.
Your unique goals will vary, and they may even change over time. Working with a financial planner is crucial for setting, tracking, and working toward your larger goals. They can help you set realistic timelines and determine what you need to do to reach them. As you work towards these goals, your financial planner will be there to make sure you’re on the right path.
Need Help Building Your Family’s Budget?
At Chladek Wealth, we specialize in family financial planning. Building and following a budget for your family serves as the cornerstone of maintaining healthy money habits, but you don’t have to do it alone.
We’re here to help you and your family set goals, create milestones and follow a budget that works with your needs. Feel free to schedule some time on our calendar to discuss your concerns and how we may be able to help.
The contents of this article are for general information and educational purposes and should not be construed as specific investment, financial planning, tax, accounting, or legal advice. Please consult with a professional advisor before taking any action based on the contents of this article. All investment and financial planning strategies involve the risk of loss that you should be prepared to bear. We cannot guarantee any investment performance whatsoever, and past performance is not indicative of potential future returns.