Even the best savers sometimes find it difficult to stick to a budget. The good news is that making errors is part of the process. And, as you become more comfortable with it, you’ll have a deeper knowledge of your relationship with money and greater financial independence.
There’s no secret formula to keep your budget straight, but there are a few things you can do. Here are 11 techniques for overcoming obstacles and maintaining enthusiasm for sticking to a spending plan.
11 Ways to Stick to a Budget
1. Find out why you’re doing what you’re doing.
The whole idea behind a budget is to assist you in achieving your financial objectives. It may be more difficult to keep to if you haven’t established any goals. Begin by considering some questions. What do you want money to accomplish for you? How can money help you live your beliefs? How can money help you improve your life? Keep these financial goals
2. What are the tools
These days, there are dozens of budgeting apps and online tools to choose from. Take advantage of free trial periods to find one that works best for you. If you’re more of a spreadsheet person, that works too. Being able to visually plan and refer to your budget can help you stay on track.
3. Customize the categories
Most budgeting apps automatically categorize transactions. It works—sometimes. But don’t feel like you have to stick with their suggestions. Create custom categories that align with your spending or savings goals. This helps you create a budget that encompasses your real-life financial situation.
4. Include all purchases.
Large, infrequent expenses—like bi-annual insurance premiums or even a yearly vacation—can throw your budget out of whack and discourage you from sticking with it. Do an annual review of projected expenses, and try to save monthly for those anticipated, one-off costs.
5. Track your emergency fund.
An emergency fund can assist with unanticipated large expenditures—the sort that even the best budget is unlikely to cover. Add an emergency fund as a savings objective to your budget if you don’t already have enough saved up.
6. Use a “cheat” category.
A “cheat” category in your budget could help you get some much-needed freedom. When you want to buy something that didn’t make it into the budget, pull from here.
7. Create weekly budgets for certain expenses.
While monthly budgets are the norm, you may need to think shorter-term for some expenses. For example, if you spend a lot on entertainment early in the month, you’ll be left with nothing for that category toward the end. Instead, try a weekly budget for frequent expenditures.
8. Set non-financial limits.
Sometimes it can be easier to stick to a budget if you focus on the activity rather than a specific dollar amount. For example, give yourself a “budget” for how many times you can eat out or order takeout each month.
9. Stack your savings.
Saving money on your purchases can help keep your budget on track without sacrificing your needs or wants. Whether you’re shopping online or in a store, look for opportunities to save—like stacking coupons, using discounts, or taking advantage of cash-back opportunities.
10. Work with your partner.
It’s difficult to budget with a partner or spouse if you’re not on the same page. Start by building your budget together, and have regular money dates to discuss your challenges and wins.
11. Cut your monthly bills.
Reducing your monthly bills can free up room in your budget and motivate you to stick to it. Regularly comparison shop and try to negotiate rates for insurance policies, subscriptions, and telecom services. Refinancing high-rate debt, like your auto loan or credit card bills, can also help you save money each month and slowly pay off debt.
4 Common Problems & Solutions When Sticking to a Budget
The 11 strategies mentioned above can assist you in keeping to a budget. But let’s take a closer look at some of the most common challenges individuals face when budgeting. Many of these are caused by worries and emotional hurdles that may be tough to overcome.
Problem #1: You get overwhelmed and don’t start.
For some, starting is the toughest part. There are dozens of budgeting tools to choose from, and figuring out which one you “should” use can leave you in a state of analysis paralysis.
Solution: Try options without committing.
You can read reviews and comparisons of budgeting tools, but the best way to start is to simply try it out and create a budget. Many apps offer free trials you can use to get a feel for the platform. And don’t feel like you need to fill everything in during the test run. Start with one or two categories to get a feel for the new system.
You also don’t necessarily need to use an app. After all, the “best” budgeting tool is the one you’re going to stick with. Some people create an envelope system and only use cash or their debit card because that’s what works for them. However, you can connect budgeting apps to bank accounts and credit cards to sync your information, and many people find apps make it easy to organize and analyze their budget.
Problem #2: Facing your finances can be scary.
Creating a monthly budget means coming face-to-face with your financial situation whether you have high average monthly car payments. Listing out your income and expenses can be fun when you’ve got all the money in the world. But it’s much more difficult when you are afraid to look at how much debt you have, struggling to get by, or when your income is irregular. This is especially true if you’re ashamed of your debt.
Also, learning how to stick to a budget can be synonymous with limitations. You may prefer to spend money freely rather than being constrained by a set monthly or weekly budget.
Solution: Focus on your goals.
Rather than focusing on what might be troubling about your finances, list the goals you want to use your money to achieve; like being debt-free or grow your savings account. Perhaps you’re saving for a home, building an emergency fund, saving money for the holidays or paying down student and personal loans. Prioritize the goal, and keep it in mind as you get real about your finances.
Also, reframe the idea of a budget as a spending plan. Rather than keeping you from spending money, a budget asks you to be realistic about how much income you have and your necessary expenses. Then, you create a plan for what’s left based on your goals and what makes you happy from investing for retirement or finally invest in some of the best roi home improvements with great ROI.
If you need a helping hand, you could also sign up for a free debt and budgeting session with a nonprofit credit counselor. The certified counselor can review your finances, help you create a budget, and offer advice on how to manage debt.
Problem #3: Unrealistic budgets lead to giving up.
Figuring out how to set a budget and stick to it can be tricky, and people often stop after a few weeks or months. However, as with getting started, the tools aren’t necessarily the core issue.
A financial health survey from Lending Club and Harris Poll found that 73% of people say they have enough time to learn about finances, and only 36% think budgeting is too much work.
One problem is that many people start by creating the budget they wish they could follow. But then, they give up after unexpected expenses throw off their budget or they realize the budgeting system is too complicated.
Solution: At first, focus on tracking and be flexible with your budget.
Rather than creating a budget, you might want to track your usual spending for a month or two to give yourself a good baseline. From there, you can review the results to see if your spending aligns with your goals. Then, realistically create and refine your budget based on these results.
For example, dining tends to be a variable expense and a source of surprise. After tracking, let’s say you discover you’ve been spending $150 a month on take out. Thinking that’s too much, you decide to set a budget of $75 for the following month. Despite every effort to stay on track, maybe you chose to spend time with your family, not cooking and cleaning up, or maybe after a long and stressful day at work, ordering out was just easier. So by the end of the month, you still spent $125.
Remember, your budget is your spending plan. Rather than judging your spending, you can now use this information to tweak your budget with intent. You may decide that there are times when spending money on dining is a worthwhile expense and choose to cut back on other expenses instead. Or, maybe you discover that to cut back on take-out, you need to start prepping meals in the morning to avoid end-of-day splurges.
It can take several rounds of analysis and refinement to create a budget that fits your lifestyle and aligns with your goals.
Problem #4: You’re not a natural saver.
It seems like some people are natural-born savers. They may have their own money setbacks—such as failing to invest in worthwhile purchases—but budgeting can be easier when you tend to feel good about saving and practice financial self care. On the other hand, spenders may impulsively make purchases and have trouble with repeatedly going over their budget.
Solution: Remember your goal and replace spending with another action.
If you want to learn how to stick to a budget and save money, you may need to set aside time for self-reflection. If you didn’t clearly list your goals when you created a budget, having these front and center will be important.
You could even put a sticker on your bathroom mirror, or your cards, with a reminder of what you’re working toward. Not just how much money you need, but how you’re going to spend the money or feel in the future.
Additionally, try to figure out what triggers your impulse purchases. Often, stress and boredom can lead to overspending. Or, you may find yourself browsing and buying online as a way to put off other tasks. Building awareness around your triggers is a good first step. Then, rather than trying to stop outright, see if you can circumvent your spending habit by replacing it with something that better aligns with your goals.
The Bottom Line
Sticking to a budget might be difficult for a variety of reasons, but the most significant of them is that people set incorrect expectations and develop a new mentality by focusing on long-term objectives rather than immediate desires. These aren’t merely stumbling blocks to overcome; actual effort can lead to tremendous development.