Posted by Lending Club :: October 15, 2010 @ 3:10 am

Most people with at least a modicum of interest in personal finance know how to make a budget. If you’re one of these, you know how to allocate money for your rent or mortgage, utilities, entertainment, savings, and other categories. You know that your overall money outflow can’t be more than what you’re bring it. In general, you know how to make your financial life look really good on paper.

It’s taking it off the page that’s hard. Keeping your spending according to your budget is half the battle when it comes to making your money work for you. Maybe even more than half.

Any budget newbie can tell you that a budget won’t work unless you stick to it, and any veteran can assert how difficult that is. If you’re struggling with sticking to your budget today, here are some ideas that might help.

Look at Your Budget Often
It’s easy to make a budget and then forget about it, or at least forget the specifics of how much you decided to spend and where to spend it. And it’s easy to let yourself off the hook for forgetting these, and then for spending your money differently than you had planned because you forgot.

To overcome this, keep your budget in front of you. Leave it open on your computer so it’s always there in the background. That way, your eyes will pass over it often and you won’t have any excuse for not looking something up if you forget a number.

You can also tack up a hard copy and carry one in your purse or your wallet. That way, you’ll have it wherever you need it and you’ll be able to access it even when you’re not at home.

Review Your Spending Trends Every 3 Months
Everyone knows to check how you're doing against your budget every month, while doing a more serious review at the end of the year.  What most people don't realize is that monthly reviews are not very actionable whereas an annual review comes in too late to make adjustments.

Make time every quarter to review your budget and take decisive actions to ensure you are not left lamenting overspending when your annual financial check-up comes.

Make Friends With Other Budgeters
When it comes to personal finance, there are two kinds of people in this world: those who follow a budget and those who don’t. If you’re trying to stick to your budget, make sure you are friends with people who have similar goals.

Having friends who work on a budget means you have permission from them to check yours and, if necessary, to avoid or change an outing that you can’t afford or that doesn’t fit in your financial plan for the month. You can even set up some accountability with these friends, and have them ask you each week or each month if you’re keeping with your plan.

Having budget-minded friends may also give you some ideas for how to save money and make it work better for you. Two heads are better than one, and so the more input you have, the more likely you are to find ways to keep to your budget and get more out of every dollar.

Talk About Your Budget
Don’t hide your budget away somewhere, either physically or psychologically. When you’re in the process of making it, let people know. Talk about what you’re trying to do and why you’re trying to do it. Speaking your motivations out loud will help you remember them later on, when initial enthusiasm might have faded and you’re struggling with the choices you made.

Talking about your budget also gives you the motivation to stick with it. After all, you don’t want someone who heard you talking about it to ask you how it’s going later on and have to tell them that you let things fall apart.

Use Cash! Cash is King.
If you’re really struggling with your budget, consider making most of your spending cash-based. That way, you can literally divide your money into physical piles, so you can actually see how much you have to spend on different things. When the pile is gone, you’ll have the physical reminder that you can’t spend any more there until the next month.

Some utilities and other expenses might require you to pay by check or credit card.  If you have one of these, you can still make your spending cash-based.  Simply take the pile of money and deposit in the bank before you write your check or use your card.

Follow these suggestions, they will help you out.  If you’ve come up with other ways of sticking to your budget, we’d love to hear them.