While there is something to be said for being spontaneous from time to time, consistency is essential when it comes to money management for your family. Unless you are lucky enough to be independently wealthy and financially secure, budgeting is an essential part of your life. It helps you to determine what you need to spend your money and how to manage spending and savings. You may be able to improve money management and budgeting when you follow a consistent pattern over the years. These are a few of the benefits associated with budgeting consistency.
Saving Money Regularly
Many families struggle to save a healthy sum of money regularly. You must have a healthy savings account balance to achieve financial security. With consistency in saving, you can reach your financial goals. The key is consistency, start saving now it doesn’t matter if you start with $1.00 per paycheck just start a savings program. Then as this balance increases slowly over time, you will be motivated to increase the amount. And because saving is now a habit it will become easier to do. According to Investors.com saving just $20/week could net you almost $328,000 at retirement. Of course, as you get older you should be able to increase that weekly amount. But the key is consistency… as Nike says, “Just Do It”.
Why Loyalty Programs Encourage Consistency
Many businesses today use variations of a loyalty program to encourage your repeat business. They are so effective that some business hire companies to handle their loyalty program management. The company wants to create a habit in you (i.e. that you habitually shop at their store). To get you hooked they offer you bonuses, for instance, a restaurant might offer a Free Appetizer or Desert, a car dealer might offer free oil changes for life, etc. They know that by getting consistency on their side they will make more money. This idea was first championed by Gillette (the razor company). Back in 1904, King Gillette received two patents on razors, blades, and the combination of the two (so no one else could make blades to fit his razors for the lifetime of the patent). Initially he sold his razor handles for $5 and a dozen blades for $1 although other companies made similar razors Gillette was the premium brand. But his real coup came during WWI when he was able to massively expand his user base by selling his razors to the government for inclusion in every soldier’s kit. This led to Gillette pioneering an entirely new business strategy. Basically he wanted consistent customers so he actually began giving away the razor for free so he could sell the blades consistently… (and it was very successful).
By taking advantage of these various programs you gain a chance to save money but the key is to ensure that you are actually saving money and aren’t simply maintaining a habit that is no longer beneficial to you. Take advantage of the bonuses only as long as they are actually beneficial and don’t buy things you don’t need just because you get a bonus.
Being Able to Allocate Funds Properly
When your budgeting efforts are consistent, you can allocate your funds towards important expense categories regularly and confidently. Without consistency, you may be inclined to overspend. This is money that just evaporates through mindless spending, such as cups of coffee and trips to fast food restaurants. Consistency in tracking your income and expenses makes it easier for you to use every dollar intelligently and purposefully. But don’t forget to budget for fun as well or your consistency will suffer. You may start out will all the willpower in the world but without something to look forward to eventually you will crack and once you do, it becomes harder to get back on track. However, by building in little bonuses for yourself, milestone rewards, and fun you become more motivated rather than getting worn down by the drudgery.
While consistency may seem dull to some people, you can see that there are true benefits that you and your family can take advantage of when you make a solid effort to be more consistent with budgeting and spending. The first step to consistent budgeting involves creating a realistic budget that is based on actual income and spending. After completing this step, you can look for ways to reduce spending or to adjust your use of funds intelligently.
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