How to Stick to a Budget

Financial worries can often be avoided by simply learning how to stick to a budget.

And we have good news for you. Teaching yourself how to stick to a budget is easier than it sounds. 

Budgets and financial planning are terms that commonly conjure up nightmares of complicated jargon and complex math tables.

But all a budget involves is carefully tracking your money that comes in and where it ends up going. That’s it!

There are many tricks on how to stick to a budget, and most of these ways don’t involve sacrificing the small joys in life. By making a conscious effort to curb your spending on unnecessary items, you may be surprised by the benefits.  

But before we dive into the tips for how to stick to a budget, we will cover some of the critical background stuff first, starting with how to create a simple budget.

How to Create a Simple Budget

If you’ve never created a budget before, this task may seem overwhelming. However, the trick is to break up your income and expense items into little pieces. 

Starting by looking at the smaller parts, you will find that the bigger picture quickly forms. The trick is just getting started.

There are many different ways to create a simple budget and all methods feature a similar set of simple steps. 

The goal of setting a budget is to identify the financial resources you earn in any given month (income) as well as determining where your money goes each month (expenses). 

Here, we will walk you through a straightforward method to create your first monthly budget.

Step 1: Identify Sources Of Income

For you to determine the level of acceptable spending, you first need to figure out how much money you have available. That is, we need to total your monthly income. 

To find your total monthly income, add all your sources of funds that are earned throughout a given period (in our case—one month). 

This list will include salary and wages, bonuses, stock dividends, rental income, bond payments, any passive income streams, as well as income earned through any side ventures you may operate. 

A simple example of your monthly income may look as follows:

In the example above, the monthly income includes their salary and cooking sales. The total of $1800 represents the maximum amount of expenses this person can handle in that month and not go into debt.

Step 2: Identify Expenses

For most people, the most difficult part of budgeting is accounting for all of their monthly expenses. This step can be tricky, as it can be easy to forget about required expenses that arise in the course of a day, week, or month.

A typical list of expenses may look as follows:

Follow a systematic approach to determine your monthly expenses. 

First, think of all the fixed expenses that you pay every month. These items are those payments that tend to be the same every month, such as your car payment, rent, insurance costs, gym memberships, and television or phone subscriptions.

After accounting for your fixed expenses, next move onto the variable expenses you face every month. Start by going through your typical week to prevent forgetting anything important. 

Ask yourself, “what expenses do I usually have on Monday” and do the same for the remaining days of the week.

This tip covers the differences in our habits daily, such as additional entertainment expenses on weekends compared to expenses throughout the week. 

Step 3: Adjust Your Income And Expenses As Necessary

The final step requires you to finalize the connection between income, expenses, and savings.

In our example, the monthly income totaled $1700, with $1540 in monthly expenses. This leaves $160 leftover, which represents the savings for this person during the month. 

If your financial plan is to save more than this amount every month, then you have two options. 

• You can find additional income to increase savings. In other words, you may choose to work a part-time job during the month.
• Alternatively, you could reduce your expenses during the month. Normally, variable costs are easier to reduce. This tendency is due to the fact that changing fixed costs often represent larger required changes to the lifestyle. After all, it is easier to eat out at restaurants less during the month (variable cost) than moving into a cheaper apartment (fixed cost).

Once the income and expenses are determined, it is important to include your desired level of savings by adjusting income and expenses as required. 

How to Stick to a Budget: 8 Things You Can Do

Now that you know how to create a simple budget, it’s time to explore tips for how to stick to a budget. Here are a few tips to get you started:  

#1 Employ Budget Management Techniques

Do you know someone who always seems to be on the ball regarding budgeting?

Chances are, they may be following some budget management techniques. 

There are many types you can master, but the most popular ones are incremental, value proposition, activity-based, and zero-based.

Research the advantages and disadvantages of each one and assess which one works best for you. 

#2 Track Your Spending with an App

Technology has made life more convenient in many areas. Your phone is all you need to track your spending habits. 

There are many finance apps available to track your spending and set daily spending limits. Some apps can notify you when bills are due. 

While it may seem tedious to input into your phone all your expenses, such as transportation, food, and other miscellaneous fees and subscriptions, it will become second nature in no time.

#3 Give Yourself An Allowance

When you were a kid, your parents may have given you an allowance for school expenses. As you grew up and found a job, you may have forgotten how to manage your funds effectively. 

However, it helps to decide how much you are willing to spend every week by giving yourself an allowance. 

This trick will also save you from feeling deprived without sacrificing your financial goals and security.  

#4 Don’t Rely On Your Credit Card

If you use your credit card for all your purchases, you risk losing the ability to match your income and your expenses effectively. 

While you are learning how to stick to a budget, delete credit card details on your phone and computer. 

This way, you won’t be tempted to buy something just because it is convenient to do so. Use your credit card for emergency purchases only. 

That beautiful bag on sale has to wait! 

#5 Visit Thrift Stores More Often

Every fashion lover knows the joy of shopping in a thrift store. Here, you can find tons of pieces that are back in style at an affordable price. 

You’ll also notice that often the clothes are in excellent condition. So you’ll end up with something affordable that will last for years.  

#6 Avoid Splurging at Restaurants and Cafes

If you don’t know how to cook, now is the best time to teach yourself how. When you rely on restaurants and cafes for your food, you end up paying higher prices for everything you eat. 

It is much cheaper to shop at farmer’s markets and grocery stores. Not only is shopping for food less expensive, but it also develops a better appreciation of the food that we put in our bodies. 

#7 Conserve Energy 

There are many ways you can decrease your household’s energy use. Solutions can include minor home improvements to behavioral changes. 

Reducing energy consumption helps prevent pollution and saves you money on electricity bills at the same time. 

Start with easy conservation techniques, such as turning off appliances and lights when not in use. 

If you want to go that extra mile, purchase energy-saving appliances.

#8 Stick to Your Grocery Lists

Have you ever gone inside a department store to get one shirt, and yet you came out with bags of items? 

If this situation sounds familiar, you need to change this bad habit. Shopping is inevitable. We all need stuff. 

But the key to knowing how to stick to a budget is to always make a list of the things you need. This way, you won’t be tempted to make impulse purchases.

And this is especially true of visits to the supermarket. Walking through grocery aisles is one of life’s greatest pleasures. However, the enjoyable experience ends once you find out the total amount you owe the cashier. 

An excellent tip for how to stick to a budget is to make a list in advance. Remember to create a list that includes stuff like:

• Bread and pastries
• Meat and seafood
• Pasta and rice
• Cereals and breakfast food
• Soups and canned goods
• Frozen goods
• Dairy, cheese, and eggs
• Snacks
• Drinks
• Produce

Most importantly, stick to the list, because otherwise, you will continue to spend impulsively. If an item isn’t on your list, then you don’t need it that badly. Instead of buying it immediately, put it on your next grocery list.

How to Motivate Yourself to Stick to a Budget

We all need a little kick in the pants at times to keep us on track. Even at the best of times, a little extra motivation never hurts.

So, check out these creative ways to keep you moving forward toward reaching your financial goals.

Track Your Progress

The best way to find out if you’ve been successful at budgeting is to track your progress. Once you can see how far you’ve come, you will be inspired to carry on.

If you fail to do this, you may be discouraged and feel as if you have not made enough progress to reach your goal.

You can use a yardstick, an app, or even a piece of paper. 

Use metrics to determine how far you’ve come. This process includes your beginning balance, fixed expenses, and investment performance.  

Celebrate Your Successes

Humans are wired to pursue goals and feature a lifestyle with routine. Celebrating doesn’t mean purchasing the most expensive bottle of wine you find at the supermarket. 

The best way to celebrate your financial achievements is to pick something within your budget that you value. This reward may be a short vacation, a cute pair of shoes, or a fancy meal. 

Here are a few ideas to reward yourself:

• Quick getaway
• Massage
• Fancy dinner at home
• Make time for a favorite activity
• Stay-at-home movie night
• Go for a hike
• Buy something nice (and cheap)
• Go camping in your backyard

If you don’t celebrate milestones and successes, you miss the opportunity to reinforce your positive behavior. 

Spend Time with Like-Minded People

One can never overestimate the power of spending time with like-minded people. When you spend time with individuals who don’t care about where they put their money, you may lose track of your goals. 

However, if you spend time with people that understand the value of money and saving, you will feel more inspired and motivated to reach your goals. You may also gain tips and useful insights that you can apply to realize success.  

Stick to Your Budget

Budgeting is a fundamental tool for financial management since it enables you to identify where your money goes. 

Getting started on your budget may be challenging for a first-timer. But once you’ve learned how to stick to a budget, you will be on the road to financial success. 

Do you know any tips on how to stick to a budget?