I was speaking with an acquaintance today who was (surprise, surprise) fighting with her boyfriend about money. She complained, as everyone does, about a bill. Her dentist bill was $88 after the hundreds that her benefits covered, and she wasn’t aware of how expensive it was, and hadn’t budgeted for it. So she was forced to put it on her credit card. She didn’t budget for emergencies, and is only now realizing that she has to do that.
It’s really tough if you don’t make allowance for unexpected expenses. Part of your monthly budget should include putting a little aside each month, not just for retirement savings, but also for emergencies. This is one of the most often neglected categories of budgeting. The woman I was speaking with today did have a good idea, though. What she does for her fun money budget is take what’s left after the rest of her budget and divide it by the number of days in the month. Then she knows how much she is allowed for each day. This is actually a very good way to manage this category of money. This woman also knows, as she plainly stated, if she goes over in any one day she has to take it out of the next day or out of another category. And she knows that can hurt, so she tries very hard not to do it.
There are many strategies that we can use to keep within a specific category. The worst one that people tend to go over on a regular basis is the entertainment budget. Whether you manage it on a weekly basis or a daily or monthly basis, you must constantly be aware of where you stand and how much money you have in your budget. It’s even better if you can manage it well enough to stay below your budget and then have a little extra to add to savings or even just to put into a special “fund” to use for a big entertainment expense. Assuming, of course, that you are not stressed into paying off credit cards or other debt.
One strategy I used to try (before debt) was to set a specific entertainment budget at all times. I would then strive to save 50% of my monthly entertainment budget and put it into a fund for bigger toys (so to speak). This is how I managed to afford a few things that I otherwise wouldn’t have at that time. It really motivated me to know that there was a special reward at the end of the line, as long as I was able to restrain myself. It really meant NO buying lunch at work, no quick snacks from the corner store, and I basically cut my alcohol budget to zero. but it was always worth it in the end!
What strategies do you do to keep within your budget? And what motivates you?
Tags: budget strategies, budget tips, Budget Tips & Advice, motivating yourself, personal budget help, savings motivation
