Even as some states start loosening restrictions and opening businesses, this is undeniably a stressful time. Neither politicians nor public health officials can be certain what will happen next with regards to COVID-19 or the economy. Some are predicting that a second lockdown is imminent, while others are saying that the economy could be up and running as usual by the end of the year.
It is a bad idea to have an unpredictable financial situation during an unpredictable time. If you haven’t already, you should build a budget for yourself and your household, so you can better manage your spending and have the financial strength to survive whatever comes next. However, having a budget isn’t nearly enough — you need to be able to stay accountable to that budget for any chance at financial success. Here a few tips and tricks for successfully sticking to your budget, no matter how stressful your current circumstances.
Be Certain Your Budget Is Realistic
When you have limited income, it is tempting to try to reduce your expenditures to zero and boost your savings sky-high. However, such a budget isn’t realistic. You will always have some costs associated with living, like rent, utilities and groceries, and you should also always give yourself some fun money to keep your spirits high. If you scrimp and save too aggressively, you risk burning out on your budget — and when that happens, you are likely to make serious spending mistakes that impact your financial security. It is better to give yourself some wiggle room with a more pragmatic budget, which might require researching your financial situation and admitting some hard truths about your needs and wants.
Tell Your Family and Friends
Once you have a budget that makes sense for your lifestyle, you should tell close family and friends about your intentions to stick to your budget for the next few weeks or months. Talking about your budget with loved ones helps you stay accountable in myriad ways, such as:
- It helps loved ones comprehend that you might not be available often for costly activities, like eating out at restaurants or seeing movies. They might not invite you to such activities, helping you avoid temptation to spend.
- It might encourage your loved ones to develop a budget of their own, which will give you a buddy during your budgeting endeavor. Commiserating with someone experiencing similar financial restraints can keep you committed to your cause.
- It gives you an incentive to stay true to your budget to avoid shame and guilt. You don’t want your friends and family to see you as flaky, especially when it comes to money matters, so you might feel extra motivated to see your budget through.
Track Saving and Spending Automatically
You should strive to make adhering to your budget as simple and painless as possible, and one of the best ways to do that is to take advantage of money management software. Digital tools connect directly to your financial accounts, and the best apps have automation to move money from one place to another on a designated schedule. Thus, you don’t have to remember to invest in your emergency or retirement funds; your software will keep you accountable to those financial goals for you.
Set Short-term Goals
Many first-time budgeters focus on long-term goals, like becoming debt-free or saving for retirement. These goals are inarguably important for long-term financial health — but they aren’t exactly exciting or fulfilling in the short-term. In addition to whatever long-term goals you might set, you should also give yourself some shorter goals, which you can achieve in the coming weeks or months. For example, you might work toward building an emergency fund with three months’ worth of expenses, or you might try to amass a smaller savings for travel (when the COVID crisis ends) or for minor renovations around your home. Because these goals are easier to reach, you will feel a greater sense of success from your budgeting efforts, and you will be more likely to stay committed to your bigger-picture financial objectives.
Reward Yourself Periodically
Finally, you shouldn’t be afraid of getting yourself a reward now and then. For every week that you strictly adhere to the rules of your budget, you might give yourself something small and special — like an ice cream, a book or something similar. Your rewards shouldn’t break your budget, but rather, they should incentivize you to stay accountable. As you get in the habit of following your budget, you might increase the periods between your rewards, and you might improve the quality of your rewards, too.
The last thing you want to do when you are feeling overwhelmed and anxious is worry about money — which is exactly why you should build and maintain a budget. By taking steps to ensure you stay accountable to your budget, finances are one less thing for you to be stressed about during this or any other trying time.