by Martin J. Stephens

Created on: September 27, 2007

Sticking to a Budget

In the back of your medicine cabinet sits a bottle of large pills. They taste like iron, and often lodge side-ways in your esophagus when swallowed. Unpleasant, vitamins form a necessary part of life. What is on the label? "Vitamin B" - for Budget. Just as any athlete can tell you that vitamins are necessary for healthy growth, financial adviser will tell you that sticking to your budget is necessary for healthy financial growth. So what can you do? How can you take your Vitamin B? Follow these 7 tips for financial fitness:

1) Look in a mirror, and trim the fat.
Physical trainers make honest evaluations, and so should you. Identify areas where you spend frivolously, and lower them or eliminate them. For example, do you smoke? How many packs a week? Do you eat out several times a week? How about that daily Starbucks coffee? Many of these expenditures can be lowered simply by cutting back or preparing beforehand at home.

2) Set attainable goals.
Marathon runners pace themselves for the long haul. Similarly, plan your budget for the long term. Make a list of financial goals you want to accomplish, such as paying off credit cards, saving for your next new car, etc. Separate the wants from the needs. Prioritize the needs in order of most important to least. Now organize your wants from cheapest to most expensive. Finally, calculate how much you would need to save each month, and set that money aside.

3) Exercise your budget every day.
Physical exercise requires repetition, and your financial fitness is no different. Keeping your finger on the pulse of your finances helps you to avoid those impulsive urges. If you know you yesterday that you can only spend so much in groceries this week, and that bag of Doritos is going to put you over your budget, time to leave those unhealthy chips alone.

4) Expect the unexpected.
Every runner faces obstacles in their path, and a financial marathon poses similar threats. Allow yourself room for variance. This is most easily accomplished by maintaining a minimum balance (a.k.a. slush fund) in your budget, and by slightly over-estimating expenses. For example, plan on spending $100 (or more depending on your family size) for groceries, but challenge yourself to keep the expense lower when you actually buy the groceries.

5) Plan for some fun.
"All work and no play makes Jack a dull boy," so they say. Exercise demands rest, and strict budges demand some "fun" money. Put a little money aside for entertainment. No matter what your hobby or favorite pastime may be, it inevitably will cost you something, so go ahead and put it on your balance sheet. Don't feel guilty when you use it.

6) Use your equipment.
Trainers often use machines to supplement their work-out. Likewise, a budget can benefit from automated services offered by most banks. Set up your bills to pay automatically, and enter these into your budget, making projections into the future. This frees up time and automates the process. Avoid using the ATM and withdrawing cash, as it is much harder to trace in a budget.

7) Garner support.
Diets are very hard to maintain alone, and so are budgets. Family members and friends can make it difficult to stick to your budget, so communicate your goals to them. Chances are they face the same problems and together you can plan your activities accordingly. Why not plan your "fun" money to be spent at the same time?

Unfortunately, there is no magic "B" pill that will instantly help you stick to your budget. Just as with physical exercise, financial exercise takes time, diligence and patience to work successfully. Remember your results, and don't get discouraged! You'll soon look back and realize it's not as hard as you thought.

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