Financial Goals - Accountability
Creating a budget can be insightful, but without accountability, is it really that useful? My parents are looking to retire in a few years and realized they needed to start living off a budget in order to see those financial goals met. What my mom completely forgot to consider was that after creating a financial budget, she had to follow it. That meant keeping track of her expenses and how they lined up with the budget she created.
In the world of financial budgets and goals, I would say that there are two types of accountability.
Personal Accountability: Keep yourself accountable for tracking your expenses, lining them up against your budget, and making necessary changes to meet your budget line items.
Outside Accountability: having a friend or financial advisor hold you accountable to tracking your expenses, lining them up against your budget, and making necessary changes to meet your budget line items.
To be successful in sticking to your budget, having both types of accountability is the best path forward. It’s okay to hold yourself to a high standard of keeping up with your spending and tracking. For many people, this is a new habit and requires time. More often than I’d like to admit, there are times when I completely forget to track my spending and have to catch up on all the time I’ve missed in order to see where I’m at in alignment with my budget.
It’s okay to forget, or fall behind, as long as you get back on the wagon and catch up. With our age of technology, you have numerous tools at your disposal to make this even easier. Here are a few methods and apps that may help you with personal accountability.
A spreadsheet. This is a tried and true way of being in complete control of your budget. You can create formulas to automatically calculate your expenses, income, and add your line items expenses as you go through the month. This is a free and easy way to track your budget.
YNAB (You Need a Budget). This is a much fancier version of budget tracking using software and app combination that links to your bank account to automatically record your expenses and categories them. All you have to do is double-check that money was categorized correctly and make sure not to overspend on any part of your budget.
Tracking apps. There are many other, more simplified apps that help track your expenses. A few examples are EveryDollar, Mint, and Pennies.
No matter how you personally track your spending, don’t forget to obtain that outside accountability too. If you’re an extravagant spender, having a friend to tell you to hold off on buying those shoes you don’t need will be helpful. If you tend to be more frugal, it’s important to have someone who can remind you to live a little and treat yourself every once in a while. Either way, your budget will thank you for the outside voice helping to keep you on track.
Challenges/Points:
Creating your budget is only the first step. Now you have to stay accountable to it.
There are two types of accountability - keeping yourself personally responsible and having an outsider help you.
Have you tried and failed to live off a budget? How would accountability change things for you if you tried again?
Questions:
Write down 3 reasons why you might struggle in keeping yourself accountable to living off your budget. What are creative solutions to overcome those 3 obstacles?
If you struggle to find a friend who can help keep you responsible to your budget, do you have a family member or financial advisor that you could seek out? Make a list of 3 people that you could reach out to for help.
Have you tried utilizing a new tool to help you stay accountable and on track for your financial goals? Take 5 minutes to check out a new app or program that you could use.
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