How to stick to a budget

What is a budget?

A budget is a way of managing finances. It is a money plan used to balance income to the house/business (money coming in) and expenditure (money spent). A budget should be reviewed regularly on a weekly, monthly or yearly basis.

How can a person stick to a budget?

Creating a budget requires honesty of all of the money coming in and naming where all the money going out is going to, e.g. bills, mortgage, petrol for the car, food.

Sticking to a budget can be difficult and requires a good understanding of the budget set and determination to stick to the budget.

A person can stick to their budget by:

Being realistic

When sticking to a budget it is important to understand that whatever the income is, there is only a certain amount of money to spend. It is also important to understand all of the spending that is required for that amount of money, sometimes this means cutting back on things so that the person has enough money for bills.

Prioritising their spending

When sticking to a budget it is important to prioritise spending from the most important to the least important. The most important spending should include bills such as mortgage, electricity bills, food and least important could be a takeaway or new item of clothing that is not necessary.

Being self disciplined

When sticking to a budget it is the hard but important to be self-disciplined. It can be easy to fall into a trap of overspending on one thing and cutting back on something else. This may work on occasions but if it becomes a regular habit then it can be very difficult sticking to the budget and a person may go over their budget and end up in debt.

Keeping their budget up-to-date

When sticking track of spending on a daily basis, this can help a person keep their budget up-to-date as they are checking it everyday and this helps them to keep focused on their goals and sticking to their budget.

Considering quality compared to price

When sticking to a budget, a person may consider buying items that are cheaper in price as better quality items tend to cost more. However, it is important to research items to see if they are getting good value for money as they may end up paying for/buying a cheaper item twice as it does not last as long as a more expensive item.

Allowing for treats

When sticking to a budget it is important for a person to allow within the budget, some money for socialising, going out for a meal, buying something new. This helps the person stick to their budget and yet feel that they are not depriving themselves of nice things.

Staying motivated

When sticking to a budget, it is important for a person to keep their goals in mind, managing their money and trying to avoid debt. This will help to keep them motivated and achieve any goals they want to achieve.

Check out the CCEA GCSE Learning for Life and Work Second Edition Textbook to find out more or check out: My Revision Notes: CCEA GCSE Learning for Life and Work: Second Edition

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