As impossible as it may seem, a new year is upon us. Along with a new year come new goals and a fresh determination to improve. Dialing in your finances is a great way to start the new year off strong. Sticking to a budget is the best way to get control of your money. Yes, sticking to a budget can feel impossible, especially when life throws unexpected expenses your way. However, mastering this skill is essential if you want to take control of your money, achieve your financial goals, and build long-term security.
So, how do you stick to a budget? Let’s explore practical strategies for sticking to your budget, making it easier to stay on track and avoid common budgeting issues. Whether you’re new to budgeting or looking to fine-tune your approach, these tips will help you develop smart money habits that can lead to lasting financial success.
Personality Quiz
Your spending personality, that is your values, spending habits, etc. COULD be getting in the way of your budgeting success. Learn about your unique money personality by taking the free quiz.
Table of Contents
- Why Is It So Hard to Stick to a Budget?
- 8 Step Guide to Stick to a Budget
- How do you stick to a budget as a couple?
- Budgeting Resources for Couples
- FAQs About Sticking to a Budget
Why Is It So Hard to Stick to a Budget?
Let’s acknowledge the elephant in the room. Sticking to a budget can be tough. The most common challenges people face include:
- Impulse spending: Unplanned purchases, often driven by emotions or stress, can blow your budget.
- Unrealistic goals: Setting overly ambitious or restrictive spending limits can set you up for failure.
- Unexpected expenses: Medical bills, car repairs, or other emergencies can quickly derail your plan.
- Lack of motivation: Over time, budgeting can start to feel repetitive and uninspiring.
Good news is, understanding these common challenges is the first step toward overcoming them. Let’s dive into actionable strategies to help you stick to your budget and make it part of your financial routine.
8-Step Guide to Stick to a Budget
Budgeting may not be easy at first, but with time, adjustments, and teamwork, you’ll discover that sticking to a budget is not only possible—it’s empowering.
1. Start with a Realistic Budget
The key to actually sticking to a budget is making it realistic. You should account for all your functional expenses, including necessary costs like housing, groceries, and utilities, as well as lifestyle spending like dining out or entertainment. Be honest with yourself about what you truly spend each month. The best way to do this is to pull together your recent bank (and credit card if you use them) statements.
How to set a realistic budget:
- Review your past bank statements to see where your money goes.
- Break down your spending into categories such as housing, food, transportation, and entertainment.
- Set reasonable limits for each category based on your values, income, and financial goals.
I teach this process step by step in CashFlow Overhaul. By setting a realistic budget and cash flow system, you’ll avoid feeling deprived or restricted, making it easier to stick to your plan.
2. Automate Your Budget (& Create a Cash Flow System)
One of the easiest ways to stick to a budget is to automate as much as possible as part of your cash flow system. By figuring out what percentage of your income needs to be set aside to fund your various categories of spending, you can automate your budgeting efforts. Send your predetermined amount of each paycheck to a designated account. Then allow that account to become an automatic registry for spending in a given category. In addition, set up automatic transfers to your savings account and automatic payments for bills like rent, utilities, and loan payments. This ensures that you’re able to stick to your budget while prioritizing your financial goals and values.
Benefits of automating your finances:
- You track your spending without manual effort.
- You save (and spend) without stress.
- You never miss a payment (or get late fees).
- You naturally reduce the temptation to spend money impulsively. No money in a given category account, no more to spend!
When you automate your budget with a cash flow system, you take the pressure off yourself to manage every aspect of your budget manually, giving you more mental energy to focus on other areas of your finances.
3. Track Your Spending Regularly
Tracking your spending is essential to sticking to a budget. By keeping an eye on where your money goes, you can make adjustments as needed and ensure you’re staying within your limits. Again, you can do this with minimal effort by establishing a cash flow plan and system. If you’re not sure or ready to start your CashFlow Overhaul yet, then choose another method for tracking spending to make sure you’re staying on track.
Other Popular budgeting methods:
- Budgeting Apps
- Spreadsheet
- Paper/planner
No matter what method you choose, by tracking and reviewing your spending, you’ll identify any areas where you may be overspending and can make adjustments before it becomes a problem.
4. Set Short-Term Financial Goals
Sticking to a budget is much easier when you feel like you’re making progress on your goals. Setting short-term financial goals helps you stay motivated and gives you a sense of accomplishment when you reach them. Long-term financial goals are also an important part of your financial wellness plan. However, it is important to experience wins along the way to your bigger goals to keep your motivation up.
Short-term financial goals could be anything including saving for a vacation, paying off a credit card, or building your emergency fund. Just make sure it’s achievable within a few months (no more than 1 year) so that you have the opportunity to celebrate wins while you’re working on improving your overall financial health and wellness!
Examples of short-term financial goals:
- Save $1000 in an emergency fund within three months.
- Pay off a $1,500 credit card balance within six months.
- Save $600 for holiday gifts over the next four months.
When you have tangible goals, you’re more likely to stick to your budget because you know what you’re working toward.
5. Avoid Impulse Spending with the 24-Hour Rule
Impulse spending can sabotage even the best budgeting efforts. To combat this, implement the 24-hour rule: whenever you’re tempted to make an unplanned purchase, wait at least 24 hours before buying it. This gives you time to think about whether the purchase is truly necessary (and in line with your values, priorities, and goals) or just a passing desire.
Tips for curbing impulse spending:
- Avoid shopping when you’re stressed or bored. (Learn More About Emotional Spending HERE)
- Unsubscribe from promotional emails or sales alerts.
- Make a shopping list before heading to the store and stick to it.
- Do online order pick-up for trigger stores. (I’m looking at you Target 🙃)
By practicing mindful spending, you’ll avoid unnecessary purchases and keep your budget intact.
6. Build Buffer Funds
Unexpected expenses can quickly throw your budget off course. That’s why building an emergency fund in addition to an ‘unplanned’ or ‘unexpected’ fund is crucial. An emergency fund acts as a financial buffer, allowing you to handle emergency costs without having to dip into your regular budget or rely on credit. The ‘unplanned’ or ‘unexpected’ fund allows you to pay for things that come up that are in line with your values, priorities, and goals PLUS passed the 24-hour rule but weren’t covered in your overall cash flow plan.
Buffer Fund Tips:
- Start small by setting aside a percentage of each paycheck.
- Aim to save at least three to six months of living expenses in your emergency fund.
- Keep the funds in separate savings accounts that are easily accessible when needed (no investment accounts).
Make sure your emergency fund is in place before building your unplanned fund. Having an emergency fund in place ensures that unexpected expenses don’t derail your financial progress. To learn more about building an emergency fund, read, ‘Smart Money Saving Tips: How to Build Your Emergency Fund.‘
7. Allow for Fun Money
A budget doesn’t have to mean depriving yourself of enjoyment. In fact, strict, restrictive budgets are often harder to stick to in the long term. Include a “fun” category in your cash flow plan that allows you to spend guilt-free on things you enjoy, whether that’s dining out, hobbies, or entertainment. Be sure to keep these funds in an account separate from the one you use to pay your bills to avoid accidentally overspending
Why fun money is important:
- It helps you avoid feeling deprived.
- It reduces the temptation to splurge or break your budget.
- It makes budgeting more sustainable over time.
Allocating a small portion of your budget to fun spending ensures that you maintain balance and enjoy your life while still working toward your financial goals.
8. Review and Adjust Your Budget Regularly
Your financial situation can change over time, whether due to a raise, a new expense, or changing financial priorities. Review your budget and update your cash flow plan regularly to ensure it still aligns with your income, expenses, and goals. Make adjustments as needed to category percentages to reflect any changes in your financial situation.
How to review your budget:
- Set a monthly or quarterly check-in to review your spending.
- Look for any categories where you consistently overspend or underspend.
- Adjust your budget limits or categories percentages as needed to reflect your current needs.
By regularly reviewing and tweaking your budget, you’ll ensure that it stays relevant and achievable over time.
How do you stick to a budget as a couple?
When couples first live together, managing money as a team is a brand-new experience. Even with a solid household income, you may find yourselves constantly wondering, “Where did all our money go?” Many couples struggle with a similar problem. Despite best efforts to save, overspending on things like takeout, spontaneous weekend activities, and online shopping can make sticking to a budget seem impossible.
Getting Started with Budgeting as a Couple
If you’ve decided it’s time to get serious about your finances, the first place to optimize is your budget. Whether you’re planning a big trip or want to save for your future together, learning to stick to a budget is an essential step for any couple. Once you’ve agreed to start budgeting together, it’s time to sit down and make a plan. You’ll need to start by setting some basic spending limits. You can set spending limits by looking back at past expenses and then coming up with average monthly spending in various categories.
Sticking to the Budgeting Process
The first month will likely be tough. New budgeters often find themselves going over shopping limits. After all, you might not realize how much those daily coffee runs have been adding up. It’s normal to feel frustrated and discouraged, wondering if budgeting was too restrictive for your lifestyle. But don’t give up!
Instead of throwing in the towel, it might be time to regroup and figure out what is going wrong. Maybe your budget needs to be more realistic and reflective of your actual spending habits. Take a look at your most recent statements and highlight the areas in which you overspent. Choose the one with the highest level of overspending and focus on finding ways to reduce just that one category.
Finding a Budgeting Rhythm Together
Over the next few months, you’ll likely find your rhythm. Once you’ve learned to track your expenses more regularly and found creative ways to cut back without feeling deprived—like cooking meals together instead of ordering in and enjoying homemade coffee instead of the café, sticking to your budget will seem much easier. By setting small financial goals, like saving $500 for your trip per month, you’ll stay motivated and begin celebrating your budgeting successes.
Now, not only do they feel more in control of their finances, but budgeting has also helped strengthen their relationship. They communicate openly about money, make joint financial decisions, and are finally saving for the things that matter most to them.
Budgeting Resources for Couples
- Money + Marriage Advice: 5 Essential Ways to Master Money
- Should You Combine Your Finances? Married Couples Complete Money Guide
- Free Couples Budgeting Templates
FAQs About Sticking to a Budget
What’s the best way to start a budget?
- Start by tracking your income and expenses for a month to get a clear picture of where your money is going. Then, categorize your spending and prioritize your functional spending needs (like housing, utilities, and groceries) before allocating funds for lifestyle expenses. This will help you create a realistic budget you can stick to.
How do I stop myself from overspending?
- Setting up a cash flow system is a great way to limit and even eliminate overspending. By only spending on personal items (or whichever category you typically overspend on) from a designated account, it’s easy to know when you’ve reached your limit. When the account designated for a given category of spending is empty, you can’t spend any more. You can learn how to set up a cash flow system HERE.
What if I can’t stick to my budget every month?
- It’s okay if you don’t stick to your budget perfectly each month. Life happens, and unexpected expenses may come up. Review your budget regularly and adjust as needed to account for these changes. The key is consistency over time, not perfection. If you’re having trouble holding yourself accountable, consider working 1-1 for added support.
How do I handle variable expenses in my budget?
- A cash flow system is a great way to handle variable expenses. Have a separate account for spending on categories of variable expenses like food, gas, and personal spending. To fund your accounts each month, you’ll send a fixed percentage of each paycheck to the designated account. For determining percentages of expenses that fluctuate (like utilities or groceries), set a baseline by averaging your spending over several months. You can also create a buffer account for months when unplanned things come up or costs are higher than expected. Learn more about Cash Flow Planning HERE.
Should I use a budgeting app?
- Many people find it more sustainable to budget directly through their bank platform, using a spreadsheet, or good old fashion paper and pen. Budgeting apps, however, can be helpful for tracking expenses, automating savings, and keeping you accountable. Many apps also offer alerts when you’re close to overspending in a category. Use one that aligns with your personality, preferences, and financial goals. Make sure whatever you choose is easy for you to use consistently.
How do I make room in my budget for fun things without feeling guilty?
- A budget isn’t meant to deprive you. Include a “fun” or “entertainment” category in your budget to set aside money for things you enjoy. By having a designated account and percentage of income planned for these expenses, you’ll be able to enjoy guilt-free spending while still working toward your financial goals.
How can I stay motivated to stick to a budget long-term?
- Set clear financial goals, like saving for a vacation or paying off debt, and remind yourself why you’re budgeting. Celebrate small wins along the way, like paying off a credit card or reaching a savings milestone, to stay motivated.
What’s the 50/30/20 rule, and is it a good budgeting method?
- The 50/30/20 rule suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment. It’s a simple guideline that works well for many people, but you can adjust the percentages to better fit your financial situation. When working on a cash flow plan through Cash Flow Overhaul we’ll set up percentages that are specifically tailored to your unique needs, situation, and goals.
How do I budget if my income fluctuates?
- If you have an irregular income, base your budget on either your lowest or average monthly earnings. When you earn more, you can allocate the extra money toward your current goals, OR set aside the money in a separate account for future lower income months.
What should I do if I keep breaking my budget?
- If you’re consistently overspending, it might be time to revisit your budget. Adjust your spending categories to better reflect your actual habits, and look for areas where you can cut back. Budgeting is a learning process, and it’s okay to make changes as you go. If you need support, guidance, or budgeting accountability, email [email protected] to learn more about financial counseling services.
Final Thoughts on How to Stick to a Budget
Sticking to a budget isn’t always easy, but with the right strategies, you can turn it into a manageable and rewarding process. By setting realistic goals, automating your finances, tracking your spending, and allowing for flexibility, you can maintain control over your money and build a more secure financial future. Remember, the key to sticking to a budget is finding a balance that works for both your financial goals and your lifestyle.
Take it one step at a time, and don’t be afraid to adjust your approach as needed. With persistence and the right mindset, you’ll find it easier to stick to your budget and make lasting progress toward financial stability.
Next Steps
- Check your Financial Health Score HERE
- Download Free Budgeting Templates
- Discover Your Money Personality
- Learn about cash flow planning
- Schedule a free consultation to see if financial counseling is right for you!
Looking for additional help?
Questions? Email [email protected] for more support.
