5 Tips for Setting Up Your First Budget


Set Realistic Goals

Like any whim, our dedication to a budget can be fleeting. Though you may feel a burst of self-discipline while you're setting your budget, know that this probably won't last long. And what's worse, it can quickly become discouraging if you find that you're not quite strong enough to stick to the budget you made.

You should know yourself and what you're capable of giving up. Don't cut out dessert entirely, for instance, if you know you won't be able to resist. Instead, you could change to a cheaper dessert, or only have it a few times per week. After a while, perhaps you'll be able to cut down even more.

You should also make sure your long-term financial goals are realistic. With your budget, it simply might not be possible to save up enough to buy a house in just one year. If you set yourself up for an impossible goal only to fail, it could discourage you from keeping at it and being able to afford a house in three years.