Its the end of the year, we are all planning for the new year deciding what we want to accomplish next year. You are probably looking at your budget if you have one and looking to see how you can do a better job of sticking to your budget. If you don’t have a budget you are probably saying to yourself, I need to budget but I can not stick to one.  In a recent post Simple Financial Tips – Budget Busters, I discussed some common budget busters, which may help with your budget planning as well as help you stick to your budget.

Sticking to your budget is important but the way that its designed may be preventing you from sticking to it.  Maybe you have designed your budget to tight.  Maybe you have designed it to loose or baggy.  Maybe you have designed it just right.  So how is your budget designed:

Tight

This budget has no room for error.  If you make one simple miscalculation such as buy four apples instead of three, use one extra gallon of water, or one extra kilowatt of electricity your budget is shot.  You have put so much pressure on your budget it can not breathe.  You have your fingers crossed at the beginning of each month hoping that your budget does not pop.

Loose

Your budget allows you a lot of freedom.  Its kind of loose and baggy.  There is a lot of room for error just in case you do plan to overspend one month it will not impact your budget.  But it does cause you to overspend in some area since you just pool all of your money in to one large category.   It enables you to hide your overspending in some categories since its loosely maintained.  But you will never break your budget since it loosely maintained.

Just Right Perfect Fit

This budget is perfectly maintained.  It fits just right in all categories.  There are no worries if you overspend in one category because you have a planned for it.  You are not pulling your hair out at the end of the month wondering where you money was spent or your fingers are not crossed hoping that you use the allocated amount of water and electricity for the end of month.  This budget allows you to relax and not stress.

Take Action Step

Now its time for you to review how your current budget is structured and decide if you have a tight, loose, or just right fitting budget.  Then be honest with yourself and make some adjustments where needed.  By doing this it will help you stick to your budget and stay on course.

Remember take one step at a time to simplify your personal finances so you can live the financial lifestyle you desire.

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