Updated: May 29, 2022
It’s important to create and follow a budget, especially if you want to become financially secure. But unfortunately, this is often easier said than done.
For most people, creating a budget is relatively easy. Just open a spreadsheet or get some envelopes, and then allocate your income towards the various expenses that you have.
The hard part comes when it’s time to follow it. There will be unforeseen expenses and impulse purchases that can ruin your budget. When this happens, you’ll often feel helpless and demotivated.
But that’s not even the most difficult part. Because the biggest obstacle in budgeting is making it a regular part of your life, much like taking a bath or brushing your teeth — to turn budgeting into a habit.
Again, it’s easy to say that you just need to soldier on, be disciplined, and use willpower to keep pushing until it becomes a habit.
This could work for some. But for most people, forcing yourself to stick to your budget can result in burnout. Which can then make you quit trying.
So how does one avoid budgeting burnout? How do you overcome laziness and procrastination when it comes to tracking your expenses regularly? Here are some tips that can help.
Start with just one category plus “Others”.
If you’re new to budgeting, then your first few attempts will feel overwhelming and stressful. It can also be confusing, especially when you hate numbers and spreadsheets.
One particularly helpful technique that I discovered is that, you can focus and have a budget for just one category, and put everything else under “Others”.
For example, if you earn P20,000 per month, then perhaps you can set P5,000 as your monthly budget for “Food and Groceries” and then P15,000 for “Others”.
Then you can spend the next few months just tracking and improving your budget on “Food and Groceries” until you feel more confident in adding a new category next month — perhaps, “Utility Bills” or “Transportation”. It’s up to you!
Set simple goals with a reward system.
Studies have shown that gamification helps people learn better. And when coupled with a reward system, it can be an effective motivational tool for learning a new habit.
For example, let’s say that you have P900 as your weekly transportation budget. Then maybe, if at the end of the week, you still have some money left from your budget, you can allow yourself to spend that money on whatever you like.
Did you have P120 left from your weekly transportation budget? Then reward yourself with your favorite milk tea! Or perhaps, save it for next week and do the same feat again, so you can treat yourself to a meal at your favorite ramen place.
Personalize your budget.
Expensive coffee is often used by financial coaches as an example of what people spend a lot of money on unnecessarily. They’d advise you to “stop wasting your money on Starbucks.”
But if you’re a coffee-lover and a cafe is where you usually unwind, then you shouldn’t feel guilty about spending money on Starbucks or wherever your favorite coffee shop is.
If this is so, then just be sure to allocate a proper budget for it. In other words, personalize your budget according to your values and priorities, and not according to what other people think you should and shouldn’t spend your money on.
Let your budget empower you.
Many people get trapped into thinking that a budget is a way to restrict how you spend. When you allocate P5,000 per month on food, the prevailing thought is that you shouldn’t spend more than that amount on food.
However, it’s better to think of budgeting as a way to optimize your spending. Creating a personalized budget means you should allocate funds towards the things that you value.
Having a budget will encourage you to examine your life, and identify the things that you can actually do without; because as it turns out, they’re not that important to you.
Going back to the coffee example, because that is something you value, then creating a budget ensures that you get to enjoy your daily latte. And perhaps, help you realize that you’re actually fine with taking the bus to work instead of riding a taxi cab.
Allow yourself to make mistakes.
Being new to creating and following a budget, mistakes are normal. Don’t be afraid to experiment with different budgeting strategies and even trying different systems, apps, or software.
More importantly, don’t be too hard on yourself when you fail to meet your budget expectations. Unforeseen expenses and impulse purchases will always happen, and it’s important to have a healthy mindset about it.
It takes time, usually several months, before you can discover the budgeting style that fits your personality and lifestyle. So just be patient and understand that it is a process.
Budgeting, I guarantee, gets easier. Each week or month that you do it, it gets easier. But you’ve got to do it regularly — and that’s the hard part. But eventually, it does get easier.
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My beautiful bride and I both have very good and solid sources of income. A little over eighteen months ago, we also began a new business venture that has taken off like a rocket. We had the capital to do this because had had a budget and stuck to it. We teach our mini-people to do likewise. Yes, we do have much more to spend these days but we refrained from taking a single peso out of our new business. We instead chose to re-invest all profits just like DRIP investing (Dividend Reinvestment Plan) allowing the business to grow at a phenomenal rate. It takes self discipline and self control but you WILL get there.
Hello Fitz! Thank you for providing a simple and easy to follow budgeting tips -and you hit it spot on. Keeping it simple while allowing flexibility when starting and while on the process encourages one to start and build it as a habbit.
Remember that budgeting is like eating – too less makes you look like a mess. Too much makes you look like a match.
Thanks for another “refreshing post.” I especially like what you said about personalizing our budget. In my case, I LOVE to eat out… so while I cannot immediately eliminate this from my weekly budget (once or twice a week at most), I still set an amount and stick to it 🙂 I also like what you said about how budgets ought to “optimize” and not necessarily “restrict” our spending.
Very informative and boost my confidence to face this post pandemic recovery of my business tnx.