Say Goodbye to Living Paycheck to Paycheck: Discipline and Accountability

discipline-and-accountability

This post is part of a series.  To start the series from the beginning, click here.  To browse through the series, click here.

Now that you have chosen your budgeting direction, system, and tools, it is time to put them all to work!

A budget is only as good as you make it.  If you don’t continuously work on your budgeting, it is likely to fail.  The more time you put in to your budgeting, the more you will be rewarded.

What will help to get you motivated to track your finances and stick to your budgets?  This is a very important question for you to answer for yourself before you begin your new budgeting strategy.

Once you’ve determine what will help you be disciplined and will hold you accountable, you are ready to begin budgeting.

Here are five simple steps to keep you disciplined:

  1. Create a Schedule – Creating a schedule for your budgeting will help you stay on track. A simple schedule could be:
    1. Create your breakdown on the 1st.
    2. Check accuracy and make minor adjustments to the budget on the 15th.
    3. Follow up on how the month went.
  1. Share your budgeting plan with a trusted person. – One of the best ways to keep yourself accountable is to enlist someone to help you. You could tell this person as much or as little about your budget as you are comfortable with.  The details of the budget aren’t as important to this conversation as the task of budgeting and following up.
  1. Check in Often – Even though you have specific dates in your schedule, it is important to check in often. You should be looking at your budget every few days or at least every time a new bill is paid or new income is received.  This is important to make sure everything is on track.
  1. Make small changes as necessary – The budgeting system you chose may not end up working as well as you’d hoped. It is okay to make changes to your process, slowly.  Don’t try to make too many changes at once because it can become overwhelming.  Make small changes to only the parts that aren’t working.  If none of the parts seem to be working together, take a step back and consider why they aren’t working.  Is it because there isn’t enough follow up?  Or does money seem to be disappearing?  Most of the time, the budgeting issue isn’t because the tools aren’t working but because there isn’t enough discipline.
  1. Follow up – It is always important to follow up on your budgeting and your changes. You should also be checking in with your savings account every month.  Is your savings increasing?  If so, that’s great! If not, evaluate why.  Is there a spending area that can be decreased?

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Say Goodbye to Living Paycheck to Paycheck: Forward Budgeting and the Digital System

forward-budgeting-and-the-digital-system

This post is part of a series.  To start the series from the beginning, click here.  To browse through the series, click here.

By now you are familiar with both forward budgeting and the digital system.  There are different tools that can be used to track forward rolling digital finances as with the other systems.

Envelopes

While it is completely feasible to use an envelope system for your budget, it may be a bit more complicated for this type of budgeting.  You can use a printable, a digital envelope tracking system, or tangible envelopes.  This system is a bit more difficult because your funds are electronic and because there are a lot of places to look at the end of the month to transfer money into the savings account.

Check Register

A check register would work great if you prefer not to use a computer based tool to track your finances.  Each month, use your check register to track every transaction.  At the end of the month, transfer all your additional funds to your savings account.

A note to make on this is to keep a running balance on your account.  For example, you can keep $1000 in your checking account each time.  Thus, if you had $1700 in your checking account at the end of the month, you would transfer $700 to the savings account and $1000 would stay in the checking account.  A buffer like this is a great way of preventing over-drafting your account at the beginning of the month.

Computer Spreadsheet

Computer spreadsheets are a great way for tracking your digital finances.  A computer spreadsheet would work just like a check register. You would record each line on the date it occurred and then create an extra line for the transfer at the end of the month.

Additionally, you could create your spreadsheet to look like an income statement instead of check register.  With this method, you can use each column for a new month so you can see multiple months at a time.  You can also drag the formulas across the page to project for any period of time.

Forward Roll Spreadsheet

spreadsheet

Another way to track using the spreadsheet is to use one color for transactions that have not taken place and another for finalized amounts.  For example: At the beginning of the month, have all the amounts blue.  Once each transaction has been made, change the color to black.  Originally you may have $75.00 blue in Electricity but after the expense occurs, it could say $73.24 (the exact amount) in black.  This will help you keep track of which expenses have been paid.

There are also many posts related to this type of a spreadsheet that can be found here.

Apps/Programs

There are many apps and programs designed to track expenses.  If you would like to track your finances digitally but are a bit overwhelmed by maintaining a spreadsheet, an app or program is a great choice.  Apps have many great visuals and other features.

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Say Goodbye to Living Paycheck to Paycheck: Forward Budgeting and the Cash System

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This post is part of a series.  To start the series from the beginning, click here.  To browse through the series, click here.

Forward budgeting, also known as the ‘forward roll’ is also a three-step process.  Each month, you project your expenses and savings.  At the end of the month, any funds that weren’t used will be transferred into your savings account.  This process repeats each month.

Envelopes

The envelope system can be used in a similar method to reverse budgeting.  The only difference is that you don’t put a set amount of money into the Savings envelope at the beginning of the month.

Instead, allocate the money into the spending envelopes.  At the end of the month, move any money that is left in the envelopes to the Savings envelope.

envelopes

Paper

Using a printable is a fun way of tracking your finances.  There are many budgeting printables online that would be a great solution for your spending tracking and savings rollover.

Computer Spreadsheet

A computer spreadsheet is very helpful when using the forward roll method.  The main point of the forward roll is to maximize saving potential.  A computer spreadsheet can help you to project your savings over time.  This is very useful when saving up for a large purchase like a house or a car.  You can find multiple examples of tracking the forward roll method with a spreadsheet here.

Apps/Programs

Apps and programs are a great way of tracking spending but can become very complicated when tracking cash.  I recommend using either a paper tool or a spreadsheet to track cash finances.

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