An achievable financial plan starts with a realistic budget that works for your goals. You’ve taken that first step and assessed your income and your expenses, your wants and your needs. The budget is written down or kept in a spreadsheet as a neat, legible table.

Everything looks so clear, the income and expenses balance out in black on white! Then why, oh why, do so many people find it hard to actually stick to that budget and spend only what they’ve allocated themselves?

How to Bust-Proof Your Budget That Works

Here are lots of tips and tricks to help strengthen your will to adhere to your own spending plan.

  1. Change your mindset.

Some people shy away from creating and sticking to a budget because they find it too restrictive. If you are one of these people, change your mindset. It may then be easier for you to follow a sustainable spending plan.

Instead of viewing your budget as restrictive limit-setting of how you spend your hard-earned money, think of it as a means to achieve financial freedom. An effective budget that works can help you free yourself from debt, enable you to achieve your financial dreams, and support your ideal lifestyle without breaking the bank.

If the word “budget” incites negative thoughts, replace it with a more encouraging nomenclature like “life plan”. Or come up with a more creative and personal term such as “mission: more money” or “treasure chart”.

  1. Get a clear picture of your cash intake.

One of the most common financial blunders during the creation of a budget is overestimating your gross income. To avoid this, remember to account for taxes, insurance fees and other paycheck deductions. If you are newly employed, project a conservative salary just to be on the safe side.

Estimating your future income may be more complicated when you are self-employed or freelancing. If your monthly earnings are inconsistent, you can try to come up with an average figure based on what you’ve earned over the past two years. However, if you have a wildly unpredictable cash intake, you may want to opt to estimate based on your most minimal monthly income.

Read: How To Start Building Your Investment Portfolio

  1. Create a list of all of your possible expenses.

Keeping an accurate record of your expenses can help you determine whether you’ll need to re-tool your budget. Calculating your fixed monthly bills is easy, but capturing all of your possible expenses can be tricky. Remember to include all those expenses that occur quarterly, bi-annually, annually, every two or three years and, of course, those that occur irregularly. Meticulously examine your bank statements and credit card statements to help you come up with a list of all the kinds of expenses to be included in your budget.

  1. Cut back on unnecessary expenses.

A Harris Poll conducted by Harris Interactive revealed that a whopping 70% of Singaporeans are shopaholics. Excessive shopping usually results in buying things you don’t need. Learn how to identify and eliminate unnecessary purchases from your expenses. Revisit your daily routine and spending habits to see how you can make adjustments. If you typically buy a cup of coffee every morning, for example, consider either cutting back on your caffeine intake or else investing in a coffeemaker.

Take a close look at your discretionary expense categories such as dining out, entertainment, clothing and the like. If you have huge restaurant bills, consider buying groceries and cooking at home instead. Cutting back on unnecessary expenses will most likely entail some major changes to your lifestyle, so be prepared to put in some effort.

  1. Contribute consistently to your savings account.

At first glance, the idea of squirrelling away money in your savings account may not seem directly connected to creating a bust-proof budget that works for you. However, neglecting to include a savings category in your budget can wreak significant turmoil in your finances when an unexpected expense does arise. Do not let unexpected financial pitfalls blindside you.

Auto-transferring a fixed amount into your savings account can help you build funds to fall back on when you have a sudden need for money. Money Sense provides a goal-oriented savings calculator to help you determine the fixed amount you need to save every month to reach your desired cushion fund level.

  1. Schedule periodic budget reviews.

Keep your spending plan effective and up-to-date by doing regular periodic budget reviews. If you feel that your current budget cannot effectively help you reach your financial goals, be sure to make adjustments when necessary. This is critical when a major life event such as a promotion, job loss, marriage, divorce, pregnancy, retirement or a death of a loved one takes place. Always make sure that your budget reflects your current financial situation.

  1. Reward yourself.

It may seem counterproductive, but rewarding yourself every now and again can motivate you to continue your efforts to stick to your budget. Allow yourself an occasional treat by allocating a portion of your budget to things and activities you are passionate about.

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Founder @ The New Savvy
Anna Haotanto is the Advisor (former CEO) of The New Savvy. She is currently the COO of ABZD Capital and the CMO of Gourmet Food Holdings, an investment firm focusing on opportunities in the global F&B industry. She is part of the founding committee of the Singapore FinTech Association and heads the Women In FinTech and Partnership Committee. Anna is the President of the Singapore Management University Women Alumni. Anna invests and sits on the board of a few startups. Anna is also part of the Singapore Chinese Chamber of Commerce & Industry Career Women’s Group executive committee. Anna’s story is featured on Millionaire Minds on Channel NewsAsia. She hosts TV shows and events, namely for Channel NewsAsia’s “The Millennial Investor” and “Challenge Tomorrow”, a FinTech documentary. Anna was awarded “Her Times Youth Award” at the Rising50 Women Empowerment Gala, organised by the Indonesian Embassy of Singapore. The award was presented by His Excellency Ngurah Swajaya. She was also awarded Founder of the Year for ASEAN Rice Bowl Startup Awards. She was also awarded the Women Empowerment Award by the Asian Business & Social Forum. Anna has been awarded LinkedIn Power Profiles for founders (2018, 2017), Tatler Gen T, The Peak’s Trailblazers under 40 and a nominee for the Women of The Future award by Aviva

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