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How to Stick to Your Budget

Budget Stretcher (featured column)
by Terry Rigg

I've had a lot of people tell me that setting up their budget was simple but when it came to living by it, payday after payday, they admitted losing interest in a very short time.

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Let's face it. The day to day drudgery of trying to figure out how to best spend your money isn't the most interesting aspect of our lives.

Let me see if I can make the budget process a little more appealing to you. I don't have any magic or secret process to tell you about, but I do have a method that will show you why a budget doesn't have to be boring.

I can do this with one word. GOALS.

When we think of goals most of us look far into the future to our retirement. That's the problem. It's hard to imagine when you're 20 what you will need when you are 65.

Accomplishing your goals doesn't have to take a lifetime. Even when they do you can set milestones along the way to break it up and get a sense of accomplishment much earlier.

If you have problems staying on a budget try setting some short term goals. We can start with an easy one. Try to save $100 without missing it.

Unless you have no income at all this is easy. Don't spend any coins for any reason. If you buy something for 25 cents break a dollar. Then all you have to do is put the change out of your pocket or purse in a jar every day.

This sounds simple enough and you've probably heard about saving change before. If you are a skeptic like I was you probably think that this isn't going to lead to any real savings at all.

Let's get back to that $100 I was talking about. How long do you think it would take you to save enough change to equal $100. Six months? One year?

The fact is that the average person can save $100 in less than three months. In some cases even sooner. That's not very long to accomplish a goal.

Now let's look at setting milestones using the same method. Roll your change once a month to see how close you are to your goal. Write down how much you saved that month on a piece of paper and put that and your rolled change back in the jar. Keep doing this until you've reached your $100 goal.

Now, what do you do with that $100? You could put it in a savings account and earn a little interest but it still wouldn't be worth much more than $100 even after a year.

My suggestion would be to pay it on one of your credit cards. That way you could turn that $100 into much more with the interest you would save. It may sound like I strayed from the topic of this article by talking about saving your change. Actually a budget is just a system of reaching goals. You do this by working backwards. You decide what it is you want to do and then make all of your money decisions based on that end.

Setting up and maintaining a budget is going to take organization and discipline. This task will be much easier if you are working toward something you really want to do.

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Copyright © 2003 Terry Rigg. All rights reserved.

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