Do you want to learn how to stick to a budget? If yes, then this article is exactly for you. We get contacted all the time asking if there are any free budget spreadsheets we can give away or how people can create a budget they’ll actually stick to.
Because, the issue isn’t that there is a lack of existing information online regarding how to budget, right? There are plenty of budgeting advice sites out there, but none of them tell you how to actually implement the strategies in real life with things like credit cards, loans, and monthly payments.
Budget spreadsheets have their place, but just like learning a new language, it’s hard to really become an expert unless you put it to use in real life! Creating a budget or following some sort of budgeting worksheet is one thing, but what about learning how to stick to it?
That's what we're going to teach you.
How Can I Learn How to Stick to My Budget?
The most important aspect of sticking to a budget is having an idea of what you spend money on every month. Basically, budget advice isn't useful unless it's personalized to your specific income and expenses.
From there you can calculate how much you need to save each month or week -- barring any loans or credit card debt -- in order to reach savings goals and pay off debts when they become due.
So, our first piece of budgeting advice is to sit down (perhaps with some wine or Netflix on in the background to help relax you) and figure out where you’re at. What do you make each month or week after taxes, what are your fixed expenses, and what is the average amount you spend each month on wants and needs (if you haven’t been tracking this, you can find this information by logging onto your bank’s online portal).
Aside from simply gaining an understanding of where you’re at, you’ll also want to try and think of some concrete goals. This is something that most budgeting advice sites also don’t tell you. They’ll teach you how to budget, which is great, but they don’t teach you the why of budgeting.
What are you looking to accomplish by budgeting?
Do you want to be able to save more in order to pay off debt faster?
Perhaps you'd like to save $5,000 for your wedding?
Do you want to simply reduce your spending?
Figuring out why you’re budgeting in the first place will not only make it easier to figure out which budgeting style works best for you, but it will also help you stay focused on your goals.
Note: This is a big part of why it’s often hard to stick to a budget. Without the right goals in place, it’s hard to stay motivated and remember what you’re working towards.
Budgeting Tip #1: Never Spend More Than You Have
Alright, now let’s get into our budget tips. As we mentioned, budgeting advice when it comes to sticking to a budget is all about personalizing the things you read to fit your personal financial situation.
So, for our first and perhaps most important budget tip, we suggest that you never spend more than you have. It’s that simple! Well, kind of. We know that lots of people struggle with overspending, and that’s quite normal. If that’s you, then keep reading.
To avoid spending more than you have, you can:
- Only head out to stores with cash. For example, if you’re going grocery shopping at Target and know you tend to wander over to the candle or clothing aisles and spend more than you intended to, only head to the store with $100 in cash to spend on groceries. Leave the cards at home!
- Open a separate bank account and get a separate debit card for everyday expenses. This ensures that you won’t be able to touch your regular checking or savings accounts. Again, leave the other cards at home.
- Get into the habit of checking your checking account before you swipe that credit card. Only charge what you know you’ll be able to pay off nearly immediately. In this way, it really helps to view credit cards as debit cards.
Budgeting Tip #2: Pay Yourself First
We talk about this in our video lesson on budgeting and why it’s so important. Paying yourself first is a great way to encourage yourself to stick to your budget because you feel like you’re getting your share of your own money first! This makes it easier to stick to a budget because it feels less like a chore, right?
Now, what is the pay yourself first method of budgeting? This budgeting style focuses on using your income to prioritize savings goals. Instead of thinking about your fixed and variable expenses each month (rent, insurance, gas, food, etc.), you think about your savings. Essentially, you’re paying yourself first instead of “the man.”
To really make this work, it’s essential to track all of your spending. So, do whatever it takes to make that happen (here is a great article on some free online budgeting tools you can check out).
When it comes to the amount that you should be paying yourself, we’d recommend using the 50-30-20 rule. You take your post-tax income, and you use 50% of it to pay for your necessities, 30% of it for things you want, and put 20% back into savings. However, instead of budgeting for those needs and wants first, you take that 20% and pay yourself first.
In short: make paying yourself first a priority and you will feel fulfilled at the beginning of each month. The money that’s leftover should be put towards necessities and other smaller expenses. But, now that you’ve “earned your share,” you’re likely to view budgeting as a fun exercise in self-improvement rather than a chore.
Budgeting Tip #3: Calculate Your Hourly Rate
If you’re still having trouble sticking to a budget then we’re sure this third budgeting tip will help. Every time you go to splurge on something, whether that’s a $150 night out at the bar with friends or $700 for a PS5, calculate how many working hours that is for you.
We often find that one of the biggest reasons why people have trouble sticking to a budget is that they don’t really relate to what it actually means for them to be spending their own hard-earned money.
Now, let’s say you earn $40 an hour. A few rounds of drinks at dinner will easily cost you nearly four hours of your time. That’s a whole half-day of work! How about that PS5? Let’s say you find a good deal at $700. That’s 17.5 hours of work for you.
When you start to break your spending down in a way that shows you how much it’s actually worth to you, it’s often easier to stick to a budget. Then, it really becomes about self-respect and discipline. Sure, that $500 girls trip to Vegas for the weekend sounds fun, but is it worth the amount of work you put in for that cost?
Get More Budgeting Advice from Wealth Stack
Budgeting can seem like a daunting task, especially when you have to do it all on your own. But with the right advice and tools, budgeting can become easier. After all, it’s the basis of your financial future.
If this sounds too complicated or if you want help implementing these strategies in real life, we’re here to help!
We have financial experts over on the Wealth Stack app ready and waiting to partner with you so that together we achieve your financial goals through budgeting tips and tricks. Simply create a free account here and log in to view free video courses on budgeting, finance basics, and investing.
What's stopping you from achieving long-term success?