While most people are well aware they should exercise more, few take the steps to get started. Depressed about their bodies, they continue living in a state of poor health. And because they’re depressed, they sit home and watch Netflix instead of hitting the gym.
Sadly, this same scenario plays out in some individual’s financial lives as well, and with dire consequences. So many families know a monthly budget would benefit them, but continue sitting on the sidelines instead. Unfortunately, it’s human nature to want to change without actually doing anything about it.
In my eyes, all of this boils down to fear. We’re scared our fitness plans won’t help us achieve results, so it’s easier to never get started. We’re afraid a budget won’t help us, so we don’t even try.
Obviously, this is a huge mistake that holds people back. When it comes to your physical health or your finances, you have to take control if you want results.
If you’re scared of failing with your budget, it’s time to set up a system that will ensure success. To find out how anyone can foolproof their budgeting efforts, I reached out to several financial advisers and wealth planners for their best tips. By implementing several of these strategies together, you can start budgeting and get your finances back on track.
1. Stick to Cash
If credit or debit spending has obfuscated some of your spending habits and made budgeting harder, try a cash budget instead.
“Foolproof your budget the same way your grandparents did – by using envelopes,” says North Dakota financial adviser Benjamin Brandt.
To get started, you should isolate a few areas of your budget where you have some discretion – entertainment, groceries, eating out – and decide how much you plan on spending in each category.
“Before the month begins, withdraw cash from the bank and start filling envelopes,” says Brandt. “Once your envelope is empty, you are done spending in that budget category for the rest of the month.”
While this might sound like a pain, sticking to cash can help you acclimate your spending to your budget constraints. And when you only use cash, it’s impossible to spend more than you have. That’s a good thing, right?
2. Look for Ways to Whittle Down Your Expenses
If you have struggled with overspending and budgeting in the past, chances are good your expenses are too high. One way to foolproof your budget is to cut some of your fixed and discretionary expenses so you have more money to work with each month.
Financial planner Ty Hodges of Client Centric San Antonio offers a strategy to help you get started.
“From your list of expenses, develop two separate budget lists – one for essentials and the other for extras. Within each general budget category, some items are essential (the mortgage or rent payment, electric bill, and groceries); others are extra (new furniture, gifts, and pizza delivery),” Hodges says.
Look through these lists to find flexible budget expenses where you can cut back, says Hodges.
“Put a star next to these flexible items so you can identify them. This will narrow your focus quickly and make a big impact,” he says.
3. Steer Clear of Large, Recurring Expenses
While cutting your discretionary expenses can help your finances, so can avoiding large, recurring expenses. By avoiding large monthly payments, you can leave more room for debt repayment and savings in your budget.
One big mistake repeated often is taking on huge car payments when you can’t truly afford them. Wealth adviser Joseph Carbone of Focus Planning Group says he cautions his clients against buying new cars and tacking on huge monthly car payments all the time.
“A new car is one of the worst investments you can make,” says Carbone. “I urge my clients to look into certified pre-owned or demo deals. You can save thousands off of the purchase price and cut down your monthly payment significantly.”
4. Look at Your Budget in a Brand New Way
Part of the reason people fail, says financial planner Charles C. Scott, is the fact that people see their budgets as restrictive and invasive. In a lot of ways, the negative feelings they have about budgeting make it easier to fail.
To combat this issue, Scott, who is a financial adviser in Scottsdale, Arizona, says we should call our budgets “spending plans” instead.
“You probably don’t like someone telling you what you should do, so let’s put you in control,” says Scott. “Just making this simple little change in wording has made the difference in people being willing to make this a habit for themselves.”
5. Set Limits With Your Spouse or Partner
Financial adviser Joshua Brein of Brein Wealth Management offers yet another interesting tip that could keep you on track – baseline spending agreements.
“This agreement means that they should come up with a pre-set amount that is considered a large purchase and agree to not exceed that large purchase cost without first getting approval from their spouse or partner,” says Brein.
For example, a couple might agree that any purchase over $50 or $100 has to be approved by both parties before they pull the trigger.
“I love this strategy because you’re basically agreeing to a set of rules to keep you accountable and keep your spending on track,” he says.
6. Talk Openly & Honestly
Part of America’s problem with money is we don’t feel comfortable talking about our struggles. And since financial issues have become a taboo subject, people would rather hide their problems and avoid asking for help.
This is a mistake, says Billy Xiao, a financial adviser from Mobius Wealth of Vancouver, Canada.
To foolproof your budget, you have to get comfortable talking things over with your spouse or partner. You need to take an introspective look at your budgeting failures while also celebrating your successes. Obviously, this all starts with talking about your budget every single month.
“Finances and budgeting may be the hardest topic to talk about in some relationships, but these conversations are essential for lasting unity,” says Xiao. “Go through that hard conversation, come to an agreement, give grace to one another, and revisit the discussion from time to time.”
Remember that budgeting is a lifelong commitment, and that it works best when conversations are open, honest, and ongoing. You may not get things right at first, but you’ll figure it out if you keep communication lines open.
The word “budgeting” might seem scary, but you should at least give it a shot. In reality, a budget is nothing more than a spending plan that can help you achieve your dreams and goals. And you never know; you might even like budgeting once you get the hang of it.
To set yourself up for success, however, you need to foolproof your budget from the start. With these tips, you’ll be headed toward budgeting success in no time.
[Editor’s note: You can also foolproof your credit by making all of your payments on time, keeping your credit card balances low and checking your credit reports and credit scores regularly. You can get two free credit scores, updated every 30 days, at Credit.com.]