How to Follow Your Spending Plan

A spending plan, or commonly referred to as a budget, is not just a list of expenses. It serves as a roadmap to reaching your financial goals.

We call it a spending plan to remove the limiting feeling, and instead focus on the idea of being able to spend on the things you need and want.

So whether you’re saving for a dream vacation, paying off debts, or building an emergency fund, having a spending plan will help you stay on track and make the most of your cash flow. It’ll help you develop a deep understanding of where your money is going and ensure that you’re allocating your resources effectively.

And with this, the biggest challenge is how you can stick to your spending plan as life happens, so we’ll share 3 simple tips below that you can follow.

1. Focus your plan on your life goals.

Many think that the purpose of a spending plan or in this case, a budget, is to monitor and limit yourself in spending on various items. And it usually goes like grocery is equal to X amount of pesos or transportation is equal to X amount of pesos. It lists down all the things you need to spend money on.

But in order to make it easier for you to follow your spending plan, keep in mind its real purpose, which is to allocate your funds based on your life goals. It should be focused on what matters to you the most.

To be clear, it can still have the usual list of needs like your utilities, rent, and such. But don’t forget to include your life goals. Put that specific objective in your list so whatever your top priorities are, whether you're starting a business, going on a vacation, or getting your dream car, these should be reflected in your spending plan.

And with this, you can feel like you’re getting a step closer to your dreams instead of feeling restricted every time. For example, when wanting to buy an item that’s not in your plan, It’s easier to say, “We’re saving for our dream home” instead of saying, “We just can’t afford it right now. It’s not within our budget.”

Attaching your spending plan to your life goals just makes it easier to follow, as you’re aiming to reach your objectives.

Now, if you’re wondering what you can do when things aren’t really going to plan, here’s our next tip.

2. Create a realistic spending plan.

When it comes to our finances, each one of us is in a unique situation. That’s why it’s important to be aware of where we are in our financial journey, since this will help you to do one crucial thing, which is to be realistic with your spending plan.

If you’re someone who’s buried in debt, or if you’re someone who’s living from paycheck to paycheck, then don’t attempt to imitate the spending plan of someone who already has financial security. Know that what works for somebody else may not work for you, and vice versa.

Take note of the 2 variables that make up your cash flow, which are your income and your expenses. While most of the time people focus on reducing their expenses, we should also ask if our income is enough.

Instead of controlling your spending, toning down your lifestyle, or even letting go of some of your dreams, direct your focus on increasing your income. Whether you're employed or running a business, seek out better opportunities. Network, pursue promotions, or invest in skills that will help you improve your rates or bring you more sales.

Now that we’ve covered this, let’s go to our last tip which is something many people might find hard to follow and that is…

3. Set your boundaries.

There’s nothing wrong in celebrating your wins and sharing good fortune with others. But this should be something that you’re willing to do yourself, and not just because you’re obliged to.

Remember, it’s okay to set your boundaries and say ‘no’. Whether it's treating friends on your birthday or celebrating a promotion, if you don’t want to do it, then it’s good enough reason. Don’t let the pressure strain your spending plan.

There’s nothing wrong in setting your boundaries. It isn’t even selfish as others would say. It’s about respecting yourself and your goals. Learn to decline requests that don’t align with your priorities.

It might feel strange at first, especially when you’re not used to saying no. But don’t forget that the money you earn is something you worked hard for. It’s up to you to decide on where you would spend it. Focus on your priorities and just say yes to what’s really important.

In conclusion, following your spending plan is key to achieving financial stability and reaching your goals. By making your plan based on your objectives, focusing on increasing your income when necessary, and learning to say no to pressure, you can take control of your financial future.

Keep in mind that your spending plan should work for you, not the other way around. With these tips in mind, you're equipped to navigate the journey towards financial success. So stay disciplined, and watch your dreams become a reality. Follow your spending plan and take care of your future self.

If you need help in how to create a spending plan that matches your situation, you can check out a previous article I wrote here.