原文: How To Stick To Your Monthly Personal Budget

I’m pretty frugal when it comes to spending. And yes, I do have a monthly personal budget too. Having been brought up in large family where resources were relatively scarce, I still remember the times when I would accompany my big brother to the bank to make my monthly deposits. Very tiring for a first grader. But yet fulfilling at the same time to see the pumped up figures in my bank book afterwards. Ah… those were the days.

Such habits grew up with me. Even though I’m able to afford some of the luxuries we see now, I’m still pretty much a saver at heart! As part of the series for the 5th ranked goal “Stick To A Budget” in my previous poll Top 10 Goals of Goal Setting College Readers, I hope that by sharing some of these saving tips, you’ll be able to realize your dreams - whatever you’ve tried to save up for – much faster than you think.

If you’re ready, let’s get on shall we?

(1) Why Do You Want To Save?

The fact is, no one saves for the sake of saving. There must be a strong underlying reason why you want to embark on this cost cutting odyssey. Ask yourself, are you saving up to support the lifestyle you want during retirement? Or to just to satisfy shorter term needs such as your wedding?

Without any strong reason to back your actions, you’ll find yourself an easy prey to temptations. What does buying a branded dress off the rack mean to you? If the opportunity cost of it is low, tendency is you’ll dash for the cashier. Wouldn’t you? But if that means you’ve to delay your wedding, do you think you’ll still buy without elaboration?

Most of the time, knowing the reason may not be enough. You’ve to make it so burning hot that sacrificing it for immediate pleasures may inflict more pain in you further down the road. For example, when I’ve decided to quit my job to write full time for Goal Setting College, one of the first things I cut down was my holiday travels. Those big ticket items took up a huge chunk off my budget. I was really glad I did that. After all, what’s a little sacrifice compared to the pain of missing out on my long time dream?

Decide you want to save. And decide it so feverishly that you’re not going to let a small temptation ruin your planned efforts. Use the 5 tips to daily motivation to constantly remind yourself of your bottom line. Or create a Vision Board. In short, do whatever you can to nourish this desire and keep it burning.

(2) Do You Have A Budget?

You’ll be amazed at the number of people who neither bother nor know how to create one. Even when they keep proclaiming they want to save! Writing out a budget helps you see where your money goes, cut down the bleeds and put it back into good shape. Most importantly, it reinforces one’s commitment to save. Yes, you’ll be surprised how important this can be.

The best way to create a budget is to start off from your existing income and expenditure:

1. Collate All Your Existing Financial Documents such as your bank statements, bills, insurance premiums payment receipts, pay slips, check book etc.
2. Record Your Disposable Monthly Income such as your take home salary (net of tax) and other less visible income streams. Remember, your stock dividends or bank interest income too.
3. List Down All Your Monthly Expenses like your rental, mortgage, insurance premiums, cable TV or Internet subscriptions, credit card payments, groceries, utilities bill. As you’re listing them down, factor in any potential expenses that you forsee you’ll be paying. Such as the monthly instalment payments for your new TV set which will be delivered next week.
4. Total Up Your Income & Expenses. Are you having more income than expenses?If yes, great! This extra stash of money can go towards your savings, retirement fund or even your investment portfolio, if you’ve one. But if you’re having negative cash flow (i.e. expenses more than income), you need to…
5. Review Your Expenses. Go through the list you’ve jot down earlier and decide the ones to cut down. Start incubating alternatives that can help you save. For example, instead of the neighbourhood store, frequent the wholesale megamarts for your grocery buys to take advantage of the economies of scale. Once you’re done,
6. Rewrite Your Budget with all the revised expense estimates. It’s very important that you write it down again to gain better clarity. As you’re doing so, challenge yourself with questions such as “What are the ways I can keep my ______ expense to this amount?” Take heed. Keep your notebook ready as some potential ideas and strategies may well hit you on the head like a bolt of lightning. When that happens, for goodness sake, write them down!

It may seem daunting having to go through such hassle just to create a personal budget. But remember, you can always catalyze it using some free budget worksheets, forms or software available online. Such as this one. Trust me, the effort’s definitely worth it.

(3) What Are Your Strategies?

Strategies help to keep you within your targets. The following are some that have worked very well for me and my friends. I’ll recommend that you try out one or two and improvise it as you track and review your progress.

• Pay Yourself First

  There’s this unique item under my “expenses” I call the “Pay Yourself First” funds. These are regular contributions made to my savings account (and recently, my mutual funds portfolio). By keeping aside a fixed amount every month as if they’re expenses, a lot of stress is reduced because I know I’ve “extras” carefully stashed away. Any leftovers from the month is a bonus! For the rampant spenders, it may be wise to set this as an automatic bank deduction. Why? Well, you can’t spend what you can’t “see”, right?

• Keep Your Budget In Your Wallet or Purse

  Ever wondered why couples put photos of each other in their wallets or handbag? It’s for the same reason! By bringing your budget with you everywhere you go, you constantly remind yourself its importance. Personally, even though I don’t keep my budget with me physically, my daily update ritual forces me to review my budget every day. This also serves as a great reality check. Imagine realizing you’ve used up your budget for entertainment when queuing to pay for your movie tickets! A “show stopper” isn’t it? Ha ha.

• Adopt Cost Cutting Habits

  Why spend more when you can get it for less? A friend of mine used to say that whenever she flash her discount coupons at her favourite Japanese restaurant. Real savers are constantly looking for opportunities to save. They’ll look out for coupons to keep, know the places to shop cheaply and switch off the lights when not in use. These seemingly small ways on how to save money eventually develop into healthy cost cutting habits as they keep doing it over a stretched period of time.

• Be More Value Focused When Making Purchases

  Conventional wisdom tells me cheap doesn’t necessary means good. If something that’s seemingly more expensive but gives you better value in the longer haul, go for it. For example, friends were bewildered when I insisted on a particular expensive brand of laptop. Because my previous experience and research supported the fact that it was one of the most durable models around. Even though I could got 2 laptops of a less costly brand with the same price, I was glad I stuck to my decision. So far, the laptop had not given me any major problems.

  Always do your own independent research by reading up product or service reviews and ask around in the forums. Especially if you’re making a big ticket purchase. Sometimes, the research may well suggest not making the purchase at all!

• Shop With A Stronger Saver

  And let him know your goals at the same time. Trust me, either you’ll find yourself buying less than you think. Or you’ll buy more at the same cost. For example, whenever I shop for clothes, I’ll make it a point to ask this particular friend of mine along. Not just because she has better taste for fashion than I do. But also because she never fails to know where the best shopping bargains are. And give me opinions whether a particular purchase is worth buying a not.

• Limit The Cash or Credit Cards You Carry

  Though this sounds a bit primitive, it’s actually quite effective for some people. For example, a friend of mine brought her finances back to control after cutting up her credit cards. It’s a bit extreme. But it works, isn’t it?

(4) How Do You Track Your Progress?

To know if your strategies are working, you must track your progress. If you’re a scatterbrain like me, you’ll probably find this harder than you think. How can you keep tab of your expenditure when you keep misplacing receipts or bills? Here’s a tip.

Record any expense immediately in a small notepad - or in my case, the mobile phone - once you’re aware of it. Transfer this to your spreadsheet or budgeting software when you’re back home. At the end of the month, do another round up by going through your bank statements for any hidden services charges or automated bank deductions.

It may take a bit of effort to get this going initially. But once you’re familiar, it’s almost second nature to you. Some technically savvy people I know record their budget and expenses on their PDAs. A very handy way to know your budgetary status almost immediately. Highly recommended if you’re into such tools. Otherwise, pen and paper are just as good.

(5) Are You Having Fun?

It’s great to follow your budget faithfully but don’t forget to let yourself loose at times. Even though I’ve got a pretty tight budget these days, I still make it a point to splurge on my favourite beer and pizza once in a while. Especially if I know I’m well on target for the month.

Go for the big picture and even if you’ve exceeded the amounts in a particular expense category, be assured that you can compensate it with savings from another section. Don’t beat yourself up over a major deviation. Just make it up next month.

Because only by making this a truly enjoyable experience, will you find yourself loving it and reaching it.

译文: 如何节省你的月个人预算