Starting and Sticking to a Budget: Step 5

This is Step 5 in a series of 5 articles about starting and sticking to a budget. To start with step 1, click here.

5. Live by the plan
The hardest part of making a budget is sticking to it. Keep receipts and write down purchases each night. Make your budget work for you. Carry around a small notebook with a folder for receipts, create a spreadsheet on your home computer, or hang a posterboard in the kitchen for everyone to help track the budget. It doesn't matter what form your budget takes as long as it works for your family.

Track your purchases daily if possible or set aside some time each week to monitor your budget. Don't feel like you need to use all the money you have budgeted for each category. If you set aside $500 for your food budget but only spend $419 this month, that's $71 of "found" money. At the end of every month, take that "found" money and apply it to a debt or put it in a separate savings account.

Do you have trouble sticking to your savings or debt repayment plan? Try paying yourself first. Before you pay anything else, take out your budgeted amounts for savings and debt repayments. At the end of the month, you might feel the pinch in a couple of areas, but you can find a way to balance your spending without "stealing" from your savings or debt repayments.

Remember to readjust your budget every few months. If you find that you're always spending more on gas, you'll need to make up the difference in another area. Maybe you usually spend less than you expect on clothing or entertainment. Then you can devote more money to gas without cutting into savings.

Extra credit: How much should you be spending on the necessities? A good rule to follow it the "60% Plan." That means 60% of your income should be for the necessities: food, housing, clothes, taxes, utilities, etc. The remaining 30% is spent on debt reduction and/or savings, with about 10 percent remaining for "fun."

The thought of creating a budget for your family can be daunting. But think back to how intimidating starting an exercise or nutrition program felt at first. Now, it's second nature to reach for an apple instead of chips or lace up your sneakers for a walk each morning. Think of your financial health as a part of your emotional health, which is tied closely to your overall well-being. When your wallet is in good shape, that's one less worry to keep you awake at night.

Trimming the fat from your budget will help you achieve all the goals you can't afford to reach now. Each time you feel tempted to stray, think of the same tactics you use to stay on track with healthy eating and exercise.

Good luck, stay strong, and keep counting those pennies. They really do add up.