Making a plan to stick to a budget is part of managing money, which involves a whole lot of different approaches and activities.
If you’re reading this post, you probably already know of the importance of creating a budget. You’ve possibly also read many different articles on the topic.
In Episode 624 of Optimal Finance Daily, J. Money of Budgets Are Sexy shares about why it’s so hard to save money. What he says about really wanting to make a positive change with spending habits is interesting, because that emotional factor can be the deciding factor as to whether you’re able to stick to your budget in the long run.
To encourage you to build up this emotional resilience in a world where many spending temptations abound, we’ve compiled several tips on how you can commit to a budget.
Listen to Dan address this topic on Episode 624 of Optimal Finance Daily.
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How To Create a Budget
The first step is to determine your after-tax income, then determine your expenses.
How much you want to allocate towards savings and paying off debt is the next step.
The 50-30-20 approach is a common one in personal finance. 50% should go to what you need (housing, insurance, transportation, groceries), while 30% goes to wants, and 20% goes to savings and debt payoff.
Revisit your budget often as your needs and activities change.
If you don’t earn a lot, you might think that creating a budget is pointless because so much money is going out. However, creating a budget is important no matter what your income range is.
Take for example, this video by Ryan Scribner, which breaks down how someone can be broke with a $100K yearly salary:
Now that you’re aware that you need a budget regardless of how much you earn, here are some tips to help you stick to your budgeting plan.
Get our cheat sheet with tips to stick to your budget — and save money!
5 Tips for Sticking to Your Budget
1. Develop discipline.
If you want to stick to your budget, it might mean that you have to think twice about buying something that you want but do not really need. If you’re in a relationship, it’s important that you plan your finances with your partner so that you’re on the same page when it comes to expenses. If you’re single, you can seek an accountability buddy or join a personal finance group online to stay motivated.
2. Stay focused on long-term goals.
You will not reap the benefits of a long-term goal overnight. However, these goals are the ones that can keep you motivated and focused on your budgeting. Good Financial Cents shares some long-term financial goal examples from individuals in the Fincon and personal finance community.
You need to prioritize both your budget and your other activities. Retirement savings and paying off credit card debt should be high on your budgeting list. And if you’re spending more time scrolling on social media than planning for your finances, try to incorporate some personal finance into your daily routine. If you have 10 minutes a day, you can tune into Optimal Finance Daily to get up to speed on your money matters! You could also read or listen to personal finance books.
4. Cook more often at home.
If you eat out many times a week with friends or family, it’s probably putting a dent in your budget. Learn how to cook quick and healthy meals at home (side note: one of my favorite cooking sites is SimplyRecipes). As you get the hang of it, you’ll see how fun it is to know the exact ingredients that are going into your meals. It will also have a positive impact on your health and wallet. Batch cook on the weekends to save time with preparation and cleaning up.
5. Track your spending.
You can use an app or track your spending the old-fashioned way with pen and paper. In fact, tracking expenses is the theme of our second group 30-day challenge!
5 More Tips to Stick to A Budget
Here are five more simple life hacks and creative budgeting ideas for you to set in action.
1. How to Stick to A Budget… and pay off debt.
Kristen from Believe in a Budget shares 12 mistakes she made while paying off debt, so that you can avoid those same mistakes. She shares that you should focus on a debt snowball, cut your lifestyle expenses, and work as a team with your partner on money matters if you’re in a relationship. She also shares that you should have a clear idea of WHY you want to be debt free in order to be 100% focused on getting rid of debt.
2. How to Stick to A Budget… and save money.
Automate your savings. When you automate your savings, you’ll feel less pain from having less money leftover–because it’s as if you never had that portion to spend in the first place. If you automate 10% of your income, you’ll find a way to live off the remaining 90%. Here’s a list of accounts that offer automatic savings transfers to help you get started.
3. How to Stick to A Budget… in college.
Triasha from Making My Way shares how she budgeted as a college student while living at home and after moving out. She focused on creating an emergency fund, living frugally, and allocating a small portion towards charity. In her own words, “Everyone is guilty of thinking that they don’t have enough to donate, but they still spend hundreds of dollars on Starbucks. Charity should be a part of everyone’s budget.”
4. How to Stick to A Budget… at the grocery store.
Laura at Savvy Family Finance has several tips on how to manage a grocery budget. What she does is plan her menu before grocery shopping, so that she knows what meals are going to be cooked throughout the week. She also focuses more on vegetables than meat and looks for stores with good deals. As a bonus, these steps help you to avoid impulse spending when it comes to food and beverages.
5. How to Stick to A Budget… with a credit card.
Remember tip #1 from the section above when it comes to credit cards — use them with discipline! You can pay household or grocery bills with a credit card while making sure to pay off the balance each month. Review the transactions often so that you stay on track.
If you think sticking to a budget or developing better financial habits is impossible, here’s what one of our listeners has to say:
Can I just give the biggest shoutout to Dan for being an awesome host for the Optimal Living Daily Finance podcast? I don't know about others, but listening to stuff about money used to be the last thing I wanted to do. Granted, it's become a new interest now but I think having Dan narrate really helps! There's something oddly comforting about his voice — something that makes you believe, “this is simple, you can do this.”
— A.A., FB Group, Jan 2018
“It is not necessary to do extraordinary things to get extraordinary results,” is a quote by business magnate, Warren Buffett. In other words, it’s consistency that will get you results.
Atypical Finance has a collection of cool and inspiring budgeting quotes to give you some motivation if you’re having second thoughts about sticking to a budget.
Do you have a quote or tip to share when it comes to sticking to a budget? Or maybe you’re looking for new friends who have an interest in this topic. Feel free to post a comment or ask a question in our lively Facebook Group!