What do you think about when you think about budgets?
For a lot of us, it’s a word that means accounting for every penny, spending only on “sensible” items, living off two-minute noodles and never having any fun. In short, budgeting has an image problem, and that could be keeping us from living our best financial lives.
It’s time we gave the concept of budgeting an image makeover. Let’s look at ways we can dust off the budget idea and make it a bit more enticing.
Be a goalkeeper. But remember, it’s a team game.
Start with the fun stuff - what’s your goal? Why do you want or need a budget? Are you saving for a big ticket item? Do you want to pay down debt? Do you want to establish an emergency fund? Are you trying to save for retirement? Whatever your financial goal is, having one is important as it will help you keep to the plan.
If you’re budgeting with your partner, make sure you’re on the same page. You can have individual financial goals as well as goals together as a family, but knowing what those goals are will help you understand each others’ priorities, hopefully avoid arguments, and you’ll be able to keep each other motivated.
Make a date, make it fun
Schedule a day every month to check your progress and tweak your budget. Set your personal budget day on a date that makes sense for you - it might be pay day or the last weekend of the month, whatever suits - but, if possible, try and keep to the same time each month.
To keep you on track switch off any other distractions and if you're budgeting with your partner, you may even want to set an agenda so you cover off everything you want to go over without forgetting anything.
But that doesn’t mean “budget night” needs to be a dull maths-fest. Give yourself a theme for the night, cook your favourite foods, treat yourself to your favourite wine, create a budgeting playlist, or start with 10 minutes of day-dreaming about what you’d do if you won Lotto - whatever it takes to get you sitting down talking and thinking about your budget.
Once you have stuck to a couple of “budget nights”, you’ll realise it’s not an opportunity to scold yourself or your partner for straying from the plan, it’s actually a chance to celebrate your progress so far and indulge in a bit of excitement about getting closer to your goal.
Think about any extra savings you might be able to make, note down any upcoming expenses, in both the short and long term, and address anything else that might have changed.
If you’ve had a tough month, try to focus on what you’ve achieved so far, and look ahead to any positive actions you can take.
Revisit and revise
Even with a set budget night every month, try not to “set and forget” your financial plan.
If things radically change during the month you may need to sit down and come up with a new plan before your scheduled date. You have have overlooked or forgotten something. You may have miscalculated something. Opportunities or expenses may turn up unexpectedly that you’ll want to address.
The point of a monthly check-in is to develop good, regular habits, to keep your financial position visible, and to keep your goals top of mind. It doesn’t mean that whatever you decide on budget night is set in stone.
Look for ways of recording and tracking your budget that you find engaging, and fun. You might like the immediacy, technology and portability of an app; you might like an old-school journal you write in by hand, or to give your bank accounts creative names … It doesn’t matter what platform you choose or how you express your goals, as long as you find your budget interesting enough to keep engaging with it.
Are you creative? Design your own goal setting journal. Are you competitive? Set yourself and your partner financial challenges each month. Are you visually inspired? Put images representing your financial goals where you can see them every day. Think about what motivates you in other areas of your life, and harness it to your budget.
Nothing will kill a budget faster than feeling as though you’re never allowed the odd splurge or bit of fun. Make sure to factor rewards and fun treats in to your planning. How much you allow depends on what you’re comfortable with, that will still allow you to stay on track.
The number one thing to remember is that you shouldn’t be a slave to your budget, it’s there to work for you!