Most people have difficulty creating a budget and actually sticking to it. That’s because it can get pretty restrictive and time consuming. The good news is, you don’t have to make it hard. You can find ways of making a budget that works for you. 

Instead of focusing on your expenses, try instead to concentrate on your savings. This process of reverse budgeting lets you figure out how much you need to save every month. Once you are able to figure this out, you can then set it up so that you have that amount going into your savings account automatically. That way it’s sort of like “out of sight out of mind” and you don’t really miss it or end up using it.

Here are a few tips on how you can create a budget that works for you:

Goals

Before coming up with a budget, it’s important that you write down your short term goals. Doing this will increase your chances of success. This is because when you write down your short term goals, you’ll be able to fully understand the big picture. You get to see what it is you are saving up for and how you can accomplish that goal in the future. 

Start by writing your goals out. You can do this for the next 3 or 6 months, 1 year, or even 5 years or more, it’s up to you what fits your needs. Remember to include the date you want to complete them along with the expected cost. After you have written down your goals, that’s when you can determine how much money you need to set aside on a monthly basis. Here’s an example:

By simply dividing the cost of the goal with the months you have available to complete the goal.

Cost of goal: $2000
Months to complete goal: 12
$2000 divided by 12 = $166.66
So you need to save $166.66 each month for 12 months to reach that $2000 goal.

The next task is to number the goals by assessing their priority. 

You can also do the same for your intermediate term goals and long term goals. Remember that if you are unable to meet the monthly savings needed to complete your short term goals after figuring out your expenses, you may need to reevaluate the things that are important to you and make necessary adjustments. What you don’t want to do is quit. You want to adjust. You can do this, but be realistic when setting your goals.

Automatic Savings

It is a wise idea to set up an automatic withdrawal from your main account or paycheck that goes directly into your savings account. This way, you won’t have to withdraw the money from your bank which can make it tempting to spend on unnecessary items. 

When you’re opening a new bank account to do this, make sure that you choose an account that will earn you a higher interest rate. This is because you won’t be touching the money for a long period of time. If you let the interest accrue, it means that your funds will grow as long as you leave them in the bank. 

As soon as the account has been opened, and you have your expenses figured out, set up an automatic monthly withdrawal with the amount that meets your goals. Then forget about it.  Use your regular method of paying bills and ignore this new account so that it can grow and not be used as a backup and you’ll be on your way to meeting your savings goals in no time flat.

Trying to make another person’s budget and lifestyle work for you is probably setting yourself up for failure. You have to find something that works for you. Be kind and understanding to yourself. If you fall, get back up and keep going! Just. Don’t. Quit.


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