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Long-term budgeting presents different challenges from short-term budgeting. Our three keys to long-term budgeting will help you stick with it.

While learning how to budget is important, the true challenge is designing a budget that you can follow for the long haul. It's simple enough to stay disciplined and save money for a couple of months, but doing it for years or even decades isn't easy. Here are three tips we recommend to our clients for successful long-term budgeting.


Set Financial Goals

It's harder to save money when you don't really know what you're saving it for. Specific goals keep you motivated. The best way to set your financial goals is to write them down and assign specific time periods for each one based on how much you can realistically save. For example, you could set one goal to have at least three months' worth of expenses saved within the year, a down payment on a home in 5 years and $60,000 in your retirement account after 10 years. These give you concrete targets.


Save Before You Spend

People who are good at saving money have one behavior in common: They pay themselves first every month. When you receive your paycheck, before you pay off any bills, transfer money into your savings and retirement accounts. If you have trouble remembering, make this process automatic at your bank.

If you spend money first, you're much more likely to cut into your savings or even forget to save entirely. This happens often with money intended for long-term savings because it's tempting to tell yourself that you can start saving for the long term a month later. Saving first helps remove that temptation.


Don't Forget to Reward Yourself

Rewarding yourself is another way to stay motivated as you move toward your goals. Despite the obvious benefits of sticking to a budget every month, it can also become a tedious process.

When you hit certain milestones, treat yourself. Let's say you're paying down $20,000 in student loan debt. You could go out to dinner with your family every time you pay off $1,000 to $2,000 on your balance, or you might buy something you've had your eye on.

Long-term budgeting will benefit you for the rest of your life, and with these three tips, you'll find it much easier to stay disciplined with your savings.

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