A home budget planner is a good way to get expenses under control and find where to cut expenses for immediate relief, but it's also a great way to plan for long-term financial success and saving. The key to successful budgeting over the long-term is to set yourself up for success from the start and stay focused.
Step 1: Put Budget Plan in Place
Put your budget plan into place and share it with the rest of your family so they know how it works. For those who will be recording entries, show them how to record entries. Place the planner in the same place as your bills and located close to where you come in and sift through the mail.
Step 2: Set Goals
Since you'll be using your planner for long-term savings, it's important to set defined goals. Whether you're saving just to have money in saving or saving over the span of a couple of years for a vacation, you need to set specific goals that are attainable. If you can't meet or exceed the goals, you aren't going to stick to them. Make a goal of $5000 in savings per year. That equates to about $420 per month. If that's too high for you, come up with a lower number and break it down into a monthly goal.
Step 3: Record for One Month
Use the planner for one month without writing in your savings goals. Operate as you normally would and get used to using the planner to enter income, expenses and payments.
Step 4: Critique the Results
At the end of the month, sit down with your family to take a look at where you ended up. If you ended up with unpaid bills or in the red, you need to take a hard look at what needs to change to make sure your monthly bills are met. If you ended up in the black, you know where you can start toward your monthly savings goal. Now it's time to write your monthly savings goal in as an expense. Ideally, you should be saving 10% of your gross income, but again, work with what you can.
Step 5: Make Necessary Changes
Look for ways to trim the budget so that all expenses (savings, as well) are met. If you need to trim, talk with the whole family to brainstorm ways to do this. Everyone should contribute an idea and everyone should be willing to give something up to help. Start the conversation and example by offering to give up your lattes (or other daily wants) in exchange for a coffee grinder and thermos.
Step 6: Create Incentives for Sticking with the Plan
Cutting back doesn't mean starve yourself. You need incentives to ensure you feel confident in what you're doing and don't feel like you're going without. You can set little weekly incentives, like one small coffee if you saved all week. Also, set monthly incentives and rewards. These should be for the whole family and inexpensive. Consider a family day at a local campground with a picnic lunch.
Step 7: Reassess Every Quarter & Year
Reassess every couple of months to ensure you're on track and take a look at the end of year to see if you met your goal.