Think about it.
Creating a budget is easy. Income minus expenses, right?
But learning how to stick to a budget…well, that’s another story.
You start off with the best intentions. You’re going to save money, pay off debt, and only buy what you need.
And next thing you know…
But guess what?
Budgeting is just like any other skill. It gets easier with time and practice.
So if you’ve found yourself falling off the wagon, don’t beat yourself up. Obstacles are a part of everyone’s financial journey. And I’m here to help.
So are you ready to dive into the budgeting tips and tricks?
Tip 1: Start From Scratch
Are you willing to wipe the slate clean and start over?
If you’ve got a budget that’s not working for you, then it’s time to start over. And if you haven’t created a budget before, then now’s the time to start.
So let’s begin with the 2 basics:
1. How much do you make each month?
2. How much do you spend each month?
Write those numbers down. We’ll need them in step 2.
Tip 2: Get Clear on Your Numbers
Want to know the first step towards financial success?
Knowing where you’re starting from. Focus on your six necessities first:
- Food (groceries only – not eating out)
We’ll be using a zero-based budget to make this work.
What is zero-based budgeting?
A zero-based budget gives every dollar a job.
Have $100 left over? Then you aren’t done budgeting yet. You need to assign that money somewhere. Debt, savings, fun money – wherever.
It’s the perfect strategy to help you learn how to stick to a budget. And actually, research shows that people who use this budget pay off 19% more debt and save 18% more money.
So here’s an example:
Use your zero-based budget to keep you accountable for every last penny. Don’t fall into the trap of wasting the extra money.
Tip 3: Adjust Your Budgeting Percentages
Let’s face it.
Time and time again, the research shows that when our income increases, our spending increases to match it.
It’s called living paycheck to paycheck. And a lot of people live paycheck to paycheck because they have a spending problem, not an income problem.
But how do you know for sure?
Take a look at these recommended budgeting percentages:
– Housing: 25-30%
– Utilities: 5% – 10%
– Food: 10 % – 15%
– Transportation: 10% -15%
– Health: 5% -10%
– Insurance: 10% – 25%
– Clothing/Personal: 10% – 15%
– Saving: 10% – 15%
– Giving: 10%
How do you match up?
Tip 4: Make Your Money Work for You
Do you like to keep things simple?
Maybe you love saving money, but you don’t always have time to search for the best deals.
Use a cash back program like Rakuten to save money on everything you buy. Like last year, when my oven decided to kick the bucket, I earned $54 from that purchase alone.
So here’s what you do:
Sign up for a free account and use the search bar to find the retailer you want to shop with.
For my visual readers, here’s how that looks:
As you make purchases, you’ll get cash back.
Then, once you accumulate your earnings – Rakuten will send you a check or deposit that money into your PayPal. It’s an effortless way to learn how to stick to a budget and get the best deals.
Note: the Rakuten link above gives you a $10 bonus for signing up and shopping.
Tip 5: Recognize Lifestyle Inflation
I’ve come a long way. I earn good money, I work hard, so I deserve it.
Or at least, that’s what we tell ourselves.
It’s that “I deserve it” or “I can make the monthly payments” mindset that leads us to lifestyle inflation. It’s like putting your financial goals on a treadmill – where you’ll never get any closer to reaching them.
If you want to win with money, then you have to live within your means.
The idea here is simple:
Spend less than you make.
Establish this habit, and watch as you take back control of your financial life.
Tip 6: Know Your Goals
Are you ready to live within your means?
Great, because it’s a crucial part of learning how to stick to a budget.
And you know what else?
When it comes to succeeding financially, you have to have a strong ‘why’
What’s your biggest financial goal? To get out of debt.
Why do you want to save money? So I can buy a home.
Why do you want to save for retirement? So I won’t be a burden to my kids.
Your goals might look a little different. But everyone wants to be better off, and you won’t get there unless you define what better off means to you.
It’s time to start thinking about the BIG picture. Create a plan, then work your plan.
It might mean fewer vacations this year or getting overtime in at work. Staying up late, and waking up early.
Dining in…at home. Finding smarter ways to save money. Are you ready to make this happen?
Tip 7: Only Spend the Dollars You Can See
Have you heard of the cash-only system?
According to the research, when you use cards, you waste 12%-18% MORE money than when you use cash.
I saved $144 my first month on the cash system. And 3 months in, I had saved over $400. Swiping a credit card just doesn’t sink in as much as spending your hard-earned dollars.
Here’s what you do:
After you’ve written your budget, then you create cash envelopes for each category. Once you run out of money in that category – you’re done.
Sure, it’s convenient to whip out a credit card. But don’t let that cripple your budget.
If you’re a beginner, I recommend starting with cash envelopes because they’re cheap and easy to label.
Once you get used to it, try switching to a cash envelope wallet. It’s durable and makes managing money a breeze.
Tip 8: Know Your Weaknesses
I always say that learning how to stick to a budget becomes easier when you put all your cards on the table.
Can you be honest with yourself about your budgeting struggles?
Maybe it’s a daily coffee run or eating out. Maybe it’s reminding yourself that it’s not a good deal if you don’t need it.
And another thing:
We’ve made it far too easy on ourselves to spend money.
We save our credit card information online, we enable one-click buy from Amazon, we sign up for ‘free’ trials and forget to cancel them.
We all have financial weaknesses. So use your budget to identify your areas of weakness and keep them in check.
Here are a few tips:
Have a shopping list – even for the little things
If you see something you like – ask yourself:
Do I really need this?
Do I want to store it?
Do I feel like cleaning/maintaining it?
Your budget helps you become aware of your spending, and your list helps you stick to it.
Clear the Excess
Look for things that are cluttering up your financial life. Like unused gym memberships or subscription services. And delete those tempting shopping apps from your phone.
Tip 9: Implement the 48-Hour Rule
Want to know one of the best things you can say when it comes to your budget?
“Let me think about it.”
Because when you hit the pause button for 48-hours, it allows the rational side of your brain to come up with more practical ways to spend that money.
Like getting out of debt or saving money.
Also, beware of “deals” that are only good for a set amount of time – 20 minutes, 1 hour, or even 24 hours.
Marketers are smart. They don’t care that you’re figuring out how to stick to a budget.
They want to get you locked in quickly before you have time to think it over. Don’t get me wrong, they’re not bad people. They just care about their bottom line, not yours.
So while you wait…
Convert Money into Hours Worked
This is a money saving trick I love.
Let’s say a shopping trip cost you $200. How many hours would it take you to make that money?
If you make $20/hour, that’s 10 hours of work. If you make $15/hour, that’s almost 14 hours of work.
Are you willing to give up hours and hours of your time for that?
Sometimes developing a new mindset will be exactly what you need to stay on budget.
Identify Low-Value Purchases
A low-value purchase is something that doesn’t make your life any better.
I know, the latest iPhone is tempting. But how’s that making your life any better?
What’s the bottom line?
Every dollar you spend is a trade-off. You’re giving up the ability to save more money, invest in retirement, or get a month ahead on the bills.
Tip 10: Keep Things Special
Do you like to treat yourself?
Don’t we all?
But if there’s one thing I’ve learned, it’s this:
Small leaks sink large ships. And sometimes the line between “I need it” and “I want it” becomes blurry.
You start eating out more. You “invest” in a new car because you can “afford” the monthly payments.
You start thinking:
I don’t feel like cooking tonight, I’ll just go grab something instead.
And those I-don’t-feel-like-cooking nights happen more often than you realize. So what can you do to keep things special?
Tip 11: Don’t Set it and Forget it
Let me ask you:
Are you ready to reach financial freedom?
Easy answer, isn’t it?
But here’s the deal:
It’s not a one and done thing. It’s a lot of little things combined. It’s about budgeting, saving money, and changing your habits.
And I know some financial sites recommend putting your finances on autopilot. I disagree.
If you’re learning how to stick to a budget, putting your money on autopilot leaves room for disaster.
So I encourage you to take a few minutes each week to review your budget. This way, you’ll prevent expenses from slipping through the cracks.
Consider it to be ‘mini-meetings’ with yourself.
It’s not just about the money. It’s about investing in your future. Start now. Not tomorrow. Not next week.
Give yourself some budget motivation.
What are you waiting for?