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When developing a budget, you have to allow for the "human factor". If you don't, then it will fail.

The human factor, means "FUN". If you don't budget for some fun, then you will not stick to your budget. On paper, you can make a budget work, but in reality, we are not creatures that can just go to work, come home, sit in a corner, go to bed, and start it all over the next day for the sake of saving money.

We need to budget in things to look forward to. It doesn't have to be much, just something affordable that you would like to do. It could be as simple as renting a couple of movies on Friday night, or meeting some friends for coffee, or even a meal, depending on your budget.

The best way to do this, is to sit down and figure out the things you really want to do for fun in any given week. Be reasonable, as you are trying to save money, but if you pick something to do on the weekend, then you need to look at your "Monday to Friday" spending.

If you are going to afford that outing on the weekend, then you may need to give up some of those "daily money grabbers" such as coffees, donuts, muffins, vending machines etc. Figure out a way to take your coffee to work, and bring snacks and your lunch. If you even save five dollars a day during the week, that will give you twenty five dollars to spend on the weekend. Its a matter of moving the money around in your budget to make it work for any given week. You know how much you have to spend per week, and if you have to cut from one category to enjoy another, then you are in control, and you do what works best for you. As long as you are not reaching for CREDIT to make it work.

You are more likely to stick to your budget and be motivated if you have a special outing to look forward to. We all need that "carrot" dangling in front of us, to motivate us to work hard. If you don't budget in any fun, then you are going to slip.

When making up your budget, start with your fixed expenses. Those are the ones you can not do much about right now, such as the mortgage or rent, car payment, property taxes etc. You should also have a savings account amount in these fixed expenses. This is called paying yourself first. Then make a list for the variable expenses, which you can try and change, such as groceries, utilities, credit cards, clothes, cash spending etc.

Make your list, and put a dollar figure beside them, and see if you can change any of your variables by even 10%. Such as the groceries, or by turning off more lights for your hydro, using less water, clothes allowance, combining your credit cards onto one lower interest card. When it is written down, its easier to play with the numbers and make everything fit. This gives you something to work with, and make it happen. But remember, don't make it too strict.

But make sure FUN is one of the categories. Even if its just 5 dollars for movie rentals, you need something to reward yourself with. After all, you deserve a pat on the back, for trying to make your future bright by budgeting now.

Learn more about this author, Diane Palmer.
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