The easiest part about a budget is creating it; the hardest part is sticking to it. I can’t remember the amount of budgets I’ve created over the years. For some reason, I couldn’t stay disciplined enough to stick to it. Something would happen that threw me off of my goals, and it seemed like I gave up every time. Last year, I was talking to a colleague about the psychology of budgeting, and ways to overcome the usual barriers. We thought that if we automated our budgets by setting up bill pay through our banks, distributing our savings into our retirement accounts, and putting away a few dollars a month for a vacation that it may solve the problem.
We both did just that, and one year later we were amazed by the results. Not only did we stick to our budgets, but we freed ourselves with the constant worry associated with managing our money. It was like our financial lives were on autopilot. We knew how much we could spend on lunches and extras, had money going into an emergency fund in case of an unexpected incident, and were preparing for retirement without the hassle.
By allowing technology to take the weight off of my shoulders, I wasn’t experiencing the depressing feeling that I get whenever it comes to paying bills each month. By feeling like I only had a set amount to spend on certain items each month, the monthly budget was never broken, was able to stash some money away for an emergency fund, and saving more for retirement than I ever have. If you decide to take our advice and put your finances on autopilot, here are some tips to take with you that will make your life easier.
Make A Plan: Most of us have no idea where we will be in 5-10 years, but is a good idea to save up an emergency fund just in case of any large unexpected costs such as last minute car repair. Having an emergency fund also allows you to lower your credit balance on your credit card and put it in a drawer. Once you decide how much to allocate to your emergency fund, how much for retirement, and any other expenses you may have, you are well on your way of being done with your budget worries.
Organize: The beginning part of the process is the most time consuming, mostly because you are deciding where to put your money and adding accounts to pay your bills. Remember that once you do this, you don’t have to mess with it. It’s worth the time to sit down and organize everything, which makes the process very simple in the long run.
Maintain: Once a week, it’s important to login to your online account and check over everything. This allows you to make sure everything is on track, and in case of a problem, stop it right away. Each month, remember to print out or save your online statements for your records.
Being able to utilize technology in your favor gives you the freedom of more time and less stress. You are able to worry about everything else in your life, know that you have a set limit for purchases throughout the month, and are on track to a better life. It isn’t about the amount of money you make; it’s about the amount you save.