Why do so many of us find it difficult to set a budget and then stick to it?
The simple answer is that we don’t derive huge amounts of pleasure from it. It’s like exercise: – we know it’s good for us to exercise regularly but it’s hard to fully commit to it over a long period of time.
It’s the same when it comes to budgeting.
The brain is hard-wired to look for shortcuts and to push aside (even if it’s momentarily) any activity that doesn’t yield an immediate benefit or instant gratification.
Is there a trick to sticking to a family budget?
No tricks, just a set of handy tips:
There are many budgeting tools that you can use – from writing at the back of a diary to an Excel worksheet. Or you can download our FREE 22Seven app that integrates with your accounts to give you an accurate idea of your spending. Getting a real handle on the family finances starts with a commitment to understanding where your money goes.
Be realistic with the amounts you are setting aside. Setting stretch and unachievable financial goals will dampen your spirits and derail you from your plan.
Are each family members’ needs addressed in the budget? Allocating money specifically to each family member is important because it will allow for “buy in”. Equally important is setting family financial goals for the things that the family collectively want, like holidays.
Make the time to regularly review your budget. It’s easy enough to set up a budget but making sure it’s reviewed helps to see the results of the family’s efforts. Analyse the findings and use those to formulate your decisions moving forward. Getting it right from the start is almost impossible, but your budget will become more refined as the months go along.
Get a financial coach. Speak to an accredited adviser. Managing your finances is similar to exercise in that to achieve the best results, it’s necessary to partner with a coach to guide you and keep you honest.
We want to partner with you in your journey to achieve your family financial goals. Visit www.oldmutual.co.za to get in touch with an accredited financial adviser today.
Old Mutual Life Assurance Company (South Africa) Limited is a Licensed Financial Services Provider