When you think of budgeting, what comes to mind? Maybe words like restriction, spreadsheets, or burdensome flash into your head. Budgeting can sound annoying or even scary, but there are so many benefits to budgeting. The goal of a budget isn’t to limit the amount of money you spend. It’s to help you spend money on the things that matter most to you so you can create the life you want.
For some, creating a budget can be pretty straightforward. The hard part comes with sticking to it. Personal finance is just that, personal. Everyone handles their money differently. The right way to manage your money is with whatever method works best for you and, more importantly, a budgeting method you can stick to that will help you achieve your goals.
How To Stick To A Budget
Creating a budget takes patience. Maintaining a budget takes practice. Sticking to a budget takes discipline. If you’re struggling to stick to your budget and are looking for practical strategies to help, look no further. Here are five tips to help you manage your budget and reach your financial goals.
1. Define Your Goal
The first place to start when trying to stick to a budget is to get clear on your goals. What financial goals do you want to achieve? Maybe it’s paying down credit card debt, saving an emergency fund, or planning a vacation. Whatever it is, you need to be clear on the direction you want to go so you can create a budget that can help you get there—determining what you why is also a great motivator to help you reach your goals.
It’s easy to go over budget in our day-to-day lives because of the instant gratification of purchasing something you want. But think about how great it will feel when you’re debt free or enjoying a cocktail on a beach. Keep your goals in mind to help keep you stay on track. There are a lot of great budgeting apps out there that can help you keep your goals front and center.
2. Find a Budget That Works for You
The best budget for you is the one that you’ll stick to. Kendall Meade, Certified Financial Planner at SoFi, is an expert at helping people get their money right. Kendall shares, “There are many different budgeting methods, and what we find is that different types of budgets work best for different personality types.” Three different budgeting methods Kendall recommends include the line-item budget, the 50/30/20 budget, and the pay yourself first budget. Here’s an overview of each:
Line-Item Budget
“A line-item budget is what you may first imagine when you think of a “typical” budget. To begin building your own line-item budget, list out each expense, or category of expenses, over a given time period, such as a month or a year. Then, you would come up with a target amount for each line item, ideally based on your goals and prior spending,” Kendall explains. She recommends reviewing your last three months of spending and assigning each transaction to a line item. Throughout the year, you can compare your expenses to ensure you remain on track. Kendall commented, “Because a line-item budget is detailed, this could be a great option if you are a detail-oriented person or prefer more control over your spending. The downside of the detailed nature of this approach is usually the time it takes to set up and maintain.”
50/30/20 Budget
The 50/30/20 budget is a method where your monthly income is divided into three categories based on different percentages. You guessed it, 50, 30, and 20. 50% of your monthly income goes towards needs, 30% towards wants, and 20% towards your financial goals, like saving and paying down debt. “A 50/30/20 budget is simple and can help you think about the big picture. Since this approach doesn’t call for too many details, it could be a great option if you are busy or simply not interested in the minutiae of spending,” Kendall Meade explains. “However, if you budget with the goal of taking control of your spending, this approach may not be as effective. It is not designed to help identify areas for improvement in your spending.”
Pay Yourself First
This budgeting method is the simplest of the three, and is centered around setting aside money towards your goals and whatever you do with the remaining money isn’t important. Kendall shares, “Say that you’ve decided that you want to save 20% of your take-home pay. The remaining 80% is your spending target for the month, and as long as it is below that target, you don’t really need to worry about exactly where or how the money is being spent. Because a spending target is simple and requires little maintenance, this could be a great option if you are extremely busy and just need a simple target to track towards.” Since this approach is even less detailed than the 50/30/20 budgeting method, it may not be a constructive approach if you’re looking to discipline your spending habits long term, Kendall recommends.
Hold Yourself Accountable
In order to maintain something, you need to hold yourself accountable. You can make the budget but if you don’t regularly check in with your spending and saving, it’s going to be harder to stick to your budget and achieve your financial goals. If you know you’re going to need support, find yourself an accountability partner. Schedule regular money check-ins with yourself or your accountability partner to review your expenses, progress towards goals, and credit card and checking account balances. If you find yourself excessively using your credit card, switch to using your debit card to help you only spend the money you have available.
Another budgeting tip to hold yourself responsible is to plan your weeks. Make it a goal to organize a grocery shopping list to help you stick to your grocery budget. We all know what can happen in Target when a trip for a few items turns into a full cart of items. The same goes for grocery stores (especially when you’re shopping while hungry). The act of sticking to a budget takes practice, but it’s worth it to help you achieve your goals.
Remember, a budget isn’t meant to be restrictive; it’s meant to help you spend money on the things that matter most to you, aka values-based budgeting. And if you try one method of budgeting and it’s not working for you, change it up. According to Kendall Meade, “Budgets can and should change over time, so you may need to revisit what is or isn’t working and make changes. If one budgeting method doesn’t work for you, try another one.”
Hit Pause on Big Purchases
If large purchases aren’t already baked into your budget, they can surely throw your budget off the rails. When working towards your financial goals, it’s best not to make quick decisions on big-ticket items. It’s up to you to determine what a large purchase means to you. It could be $100 or $1,000. But whatever you deem as a big, unplanned expense, a helpful tip is to hit pause before purchasing. “If you are someone who struggles with impulse purchases, try implementing a waiting period for any non-essential purchases. This can be anywhere from 24 hours to a week or more, depending on the size of the purchase,” Kendall Meade explains.
If you’ve found you’ve made your budget a little too limited and everything feels like a big purchase, try reevaluating and exercising moderation instead of cutting expenses out completely. “Sometimes, if we try to cut out something completely, we actually cause ourselves to overcompensate and revenge-spend later,” Kendall Meade explains. “Rather than not allowing yourself to get coffee from a coffee shop at all, consider limiting it to once a week and making it at home the other days.”
Celebrate Your Wins
Sticking to a budget is challenging and takes commitment and care. But there is nothing that beats the feeling of achieving your goals. Maintaining a budget isn’t a one-and-done scenario. You’ll likely maintain some form of a budget throughout your life, so be sure to celebrate your wins along the way. When you achieve a financial goal like paying off debt, saving an emergency fund, starting to invest, or simply meeting your due dates regularly, take a moment to relish the moment. You’re working towards achieving your goals, and that’s huge! Making a plan to celebrate once you achieve a certain milestone can be the motivation you need to stick to your budget. You deserve to be proud and happy with your accomplishments as you work toward your definition of financial success.
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