One of the surefire ways to see someone’s eyes glaze over is to bring up the word ‘budget.’ Many people I talk to associate budgeting with depriving themselves of their favorite Starbucks latte or other small luxuries. But if you change your perspective, you can actually make budgeting fun.
The purpose of creating a budget is not to stop you from spending money on things you like. Rather, it’s to make sure you have enough money for all of the things that are most important to you. I suggest referring to a budget as a spending plan. That way, you focus on how empowering it is to plan out your spending so you have enough money to achieve all of your financial goals.
There is no one way to create a spending plan. It’s all about your goals and your priorities. If your daily trip to Starbucks is important to you, then keep it in your spending plan, but take out something that doesn’t matter as much, such as the subscription to premium cable channels that you never watch. Also make sure you put money aside to spend later for emergencies, retirement and major purchases such as a house.
Once you have your spending plan down, here are some ways to have fun sticking to it.
Save for short-term fun. It’s important to save for retirement, but preparing for an event in your life that is 10, 20 or 30 years out may not keep you motivated. Include smaller fun goals that you can achieve in a year, such as a trip to Hawaii, in your savings plan. As you see yourself nearing your short-term goals, you’ll be inspired to stay on track.
Make it a friendly competition. It’s easier to achieve goals if you have a support system behind you. Find a friend or relative who also wants to stick to a spending plan and see who can go the furthest under budget each month. Come up with a creative – and inexpensive – prize for the winner.
Reward yourself when you stay under budget. Incentives can do a lot to change your behavior. Reward yourself when you go under budget by spending a portion of those extra savings on something fun (and stashing away the rest).
It’s tough to reach a destination without a map. Your spending plan is the blueprint that will lead to your financial fortune and a prosperous life – as long as you stick to it.