When creating a budget, you need to set realistic expectations. 

Why?

Because when you set realistic expectations, you are setting up yourself for success.

On the other hand, when you set an unrealistic goal that doesn’t align with your values or character, you are setting yourself up for disappointment.

Here’s an example.

When I was a senior in college, I budgeted $50 per month as my “eating out” money. 

That wasn’t a lot of money to spend for food.

And you’re right. It wasn’t a lot of money.

But when it was time to redo my budget at the end of each month, I was shocked to discover that I spent more than that.

Why? 

1. Because during this time I was going out with my ex. Was it realistic to set a $50 budget on two people who liked to eat out almost every day? No.

2. Because if you take a look at my previous expenses, I used to spend $150+ per month on eating out. Was it realistic to pull the plug and suddenly restrict me to $50? Again, no.

3. Because I was too lazy to cook and love eating out, was it realistic to create a budget where I was restricting my favorite activity? No!

What is the point of me telling you this? 

The point is that when you set goals that are unrealistic and don’t align with your values or character, you’re setting yourself up for failure.

How to Create a Budget that Aligns with Your Values and Character

Fast forward to 2020, and I can say that I’ve been maintaining a fairly well-balanced budget.

Why is this working, but it didn’t work in the past?

The answer lies in myself. No, really. I know that sounds cheesy, but it’s true.

Let me be honest. 

In order to follow through with a budget, you need to have self-discipline. But that doesn’t mean that you should be so hard on yourself. 

Instead, you need to create a budget that aligns with your values and character.

In order to create a budget that works, you need to take a hard look at yourself and ask:

• What can I make do with and what can’t I make do with?
• Does this seem like a reasonable amount?
• Will I follow through with it?
• Am I creating this budget because I think I can do it, or because I know I can follow through with it?
• Am I forcing myself to be comfortable with this budget, or am I genuinely comfortable with this budget? 

The essence of these questions determine what kind of person you are and if you’ll be able to follow through with the budget.

Example Scenario 

For example, if you’re the type of person who wants spending money, you should definitely create a budget that still leaves you spending money.

I’m like that. I like saving money, but I want the ability to spend money on whatever I want. So, how did I compromise?

1. I highly value saving my money. So for each paycheck, money gets automatically deposited into my savings accounts first. 

2. I also highly value paying off my bills and utilities. So, I set money aside enough to cover all my expenses second.

3. Last and not least, because I love to have spending money, whatever is left over I get to spend on whatever I want. 

Yep. I created a budget where after money has been sent to the different pools (rent, savings, utilities etc.), anything leftover is for me to spend on whatever I want guilt-free.

Yes. Guilt. Free.

Do you know how exhilarating that feels?

Because money has already been set aside into my savings and to pay for all my expenses, this is just money that I can use to fulfill my wants. 

So, what do you think? Was this helpful? What other tips or advice do you have to share? Comment down below because I’d love to learn more!