Buy Like Buffett: Implementing Your Own Personal Budget Control Act
A lot of people have trouble trying to live within their means on a monthly basis. These individuals would like to save money but have a hard time trying to spend less than they make. They find themselves frustrated month after month because of their inability to make any progress at saving money. In order to reach your savings goal, you should enact the following tactics to make your plan a reality.
Get an accountability partner
If you do not have anyone who is making sure you stick to your budget, then it will be almost impossible to do. You need to have a budgeting buddy who will check in on you during the month to make sure you are sticking to your plan. Your budgeting buddy could be a spouse, a family member, a work partner or a friend. It should be someone who is a responsible manager of their own finances and who can serve as a mentor and help you become financially responsible.
Monitor your progress everyday
Instead of checking to see how you did at the end of the month, you should keep track of your progress daily. This way you still have time to make up for a poor financial decision. For example, if you spend too much money on Monday, you can adjust your spending for the rest of the week so you still come in on target with your budget. Waiting until the end of the month to see how you did will allow you to make improvements for the next month, but it will be too late to make any corrections for the current one.
Add in the yearly expenses, too
A lot of people fail to keep up with their budgets because they forget about the big expenses that impact their finances once a year. Property taxes, income taxes, homeowner's association fees, and other bills that are paid annually can quickly take a budget surplus into the red. These are substantial expenses that should be properly budgeted for each month. Allocate a specific amount of money to each month to account for all of these annual expenses so the do not catch you off guard when they pop up.
Applying these tips to your financial life will make it easier for you to become a better saver and improve the overall fitness of your finances.
Mark Riddix is the founder and president of New Horizons Financial Management, an independent investment advisory firm that provides personalized investing and asset management consulting. Mark is a regular contributor to Seeking Alpha and has written financial columns for Baltimore and Washington, D.C. area newspapers. Mark publishes his own financial blog, BuylikeBuffett.com and has written the book Your Financial Playbook.