Budgeting can be quite difficult, especially if you believe you earn just enough to comfortably sustain your life. However, financial advisors say that if you’re able to pay off all your regular accountabilities easily, there’s always room for improvement when it comes to your financial activities. This way, you can stop stressing about your budget while also increasing your savings.
One of the most important things that you should be doing to reduce the stress of budgeting, or to make sure that all your financial accountabilities are covered, is to write down your daily and monthly budget. This should include the money you have and literally everything you spend money on. This helps ensure that you know where your money is going every day of every month and that you find opportunities to cut back on spending.
Another personal finance practice that will help is setting a “reasonable budget” while also doing everything you can to avoid stretching it. Don’t deprive yourself just to save because this will breed frustration, which then may result in failure; instead, work with amounts that are truly just right for your needs.
A third measure to try is to use the envelope system; this will organize your money effectively and prevent you from forgetting your financial responsibilities that may accumulate additional expenses for you in the form of penalties.
Fourth is to analyze your budget regularly because doing this will provide you the chance to evaluate your lifestyle. The brand of life you uphold always has a direct impact on your finances. If you really want to stress less about money, it would help a lot to identify which aspects of your life are costing you too much, and which lifestyle components are perhaps no longer necessarily needed.
Fifth is to treat your savings as if they were bills you have to pay. Warren Buffet even advises assigning an amount for savings and setting it aside right away, before everything else; you shouldn’t think of savings as “leftover money” you put aside because this will prevent your savings from really growing.
And lastly, create “wiggle room” for the budget. Set aside a small amount of money that will allow for spontaneous expenses that actually bring joy to life, such as your grandchildren’s request for ice cream at Baskin Robbins, or a trip to the movies with your wife. This “wiggle room” will not break your budget and decrease your savings. And if you’re not able to use it for the month, you can easily add it to your savings.