You heard it from financial specialists that it’s important to create a budget plan.

And now, you’re ready to make your own plan. However, creating a budget plan is just the first step. Successful budgeting largely depends on how you follow the plan you’ve created.

So how can you make a budget plan that works? Check out the following tips.

Monitor your spending.

In order to develop a good plan, you need to know your spending pattern. Monitor all your expenses for a month, making sure that you write down everything you spend on- from the largest amount down to the smallest cent.

After a month, study your list of expenses and based upon that, you can begin to develop a workable monthly budget plan. Carefully check your list for items that you can possibly eliminate. For example, do you have magazine subscriptions? If yes, do you really find time to read them or do they just pile up on the shelf? You may consider unsubscribing and completely slash it out of your list.

Set automatic payments.

Allocate at least 10% of your salary to your savings account by arranging an automatic payment system. You can also set automatic payments to pay your credit card bills or loans. This way, you can be sure that you will not miss a deadline.

Set goals and prioritize.

Depending on your present financial situation, you should define a clear goal and work towards achieving it. For example, if you currently have debts to pay, debt repayment should be on top of your priority. Therefore, you need to create a budget plan that matches with your goals. As soon as you’re able to pay all your creditors, then the next thing you can focus on is building your personal savings fund.

Contribute to your retirement fund. No matter how much income you’re making, it’s important to contribute to your retirement fund regularly. Take advantage of the opportunity to pay only a portion of this fund if you are an employee. Keep in mind that retirement savings include tax privileges so it’s a good way to invest.

Maintain a good balance.

You need to make a plan that will be practical and doable at the same time. For example, if you plan to cut down on your food budget, you need to make sure that you’ll find ways to save without compromising you or your family’s health. If a family member gets sick because of poor eating habits, you’ll end up with an even a bigger debts to pay on medical bills.

Give yourself a break.

It’s not a good idea to completely give up your budget on recreational activities. However, if your earnings is barely enough to cover for all your expenses, find leisurely activities that you can do on your own or with your family that does not involve a huge amount of money.