So we last left off in our previous post on How to create a budget (part 1) and I had noted that once you have created a budget, the main important thing is to stick to your budget. The key to maintaining your budget is to have simple but good records of where your expenses are going, in other words be organized. Just like how we kept our records of our spendings when we first created our budget, you’ll need to continue to keep track where your money goes and comes from.

One of the easiest ways of maintaining your budget is to keep track of your spendings through a checking account. This way, whenever you purchase anything it will show up on your statement giving you the exact amount spent. Now some people may disagree but I think it’s best to get in a habbit of using our debt/credit cards(more debt card than credit card). I can break this into 3 reasons.

  1. It is a lot easier to keep track of your finances. Everything you purchase will be on the same statement and it saves you the trouble of carrying around tons of receipts in your wallet.
  2. When I have lose cash floating in my wallet, I am more tempted to use it than I would use my card. However, I can see how that may not be the case for everyone so you just have to develop your own style of spending.
  3. Everything is a final number. Say you buy something and it comes to a total of $6.78, if you pay that in cash most likely you’ll give the cashier $7.00 even and you’re gonna get this change that’s never going to be calculated in your budget. However, when you charge $6.57 on your card, that’s how much it shows up on your statement and therefore you will have a more precise amount of how much you spent and also you just saved 22 cents.

The key thing here is to develop your money management technique so that you have something that you can use every day. Everyone is not going to have the same way of spending money, so you have to learn what kind of shopper you really are.