How to Stick To a Budget—Useful Tips on Developing Good Spending Habits
Updated · Oct 17, 2022
You’ve created the perfect budgeting plan, and you were so excited to follow it. But the days pass, your motivation decreases, and you’re nowhere near achieving your goals.
Now what? How do you keep yourself motivated long enough to re-shape your spending habits?
To help you, we put together some useful tips on how to stick to a budget.
- Set realistic but challenging goals
- Focus on failure to maintain your motivation
- Divide your budget into smaller categories
- Make sure your budget reflects your goals
- Reevaluate your plan regularly
- Stick to a routine
- Don’t be afraid to ask for help
- Use online tools and resources
- Look for ways to reach your goals faster
Read on to see how to follow these tips for living on a budget.
Make a Realistic But Challenging Budgeting Plan
You might have created the perfect budgeting plan, but is it suitable for you?
Trying to live on a budget that is too restrictive will only lead to frustration and failure. So, make it realistic for your lifestyle and income level.
That said, don’t make your goals too easy either. If they aren’t at least a little challenging, you won’t be motivated to pursue them at all. Let’s see an example.
Setting a dollar aside every day sounds like a good way to save money without even noticing, right? But for how long will you keep sticking to your goals?
It won’t increase your savings by a large margin—after all, that’s only $365 in a year. Since the end result isn’t particularly tempting, you won’t have that as a motivator.
So, all that’s left is the challenge. But you can easily set aside a dollar every day.
The problem isn’t that you can’t afford it.
It’s that you can.
So what’s the point?
It lacks that push to start moving. The secret is to set achievable goals with realistic time frames. But make them hard enough to see them as a challenge.
Focus on Failure
Focusing on the benefits of achieving your goals is a great motivation to start budgeting. But contrary to what most tips for budgeting suggest, your enthusiasm will fade quickly if you rely only on visualizing your success.
Instead, whenever you feel like you’re losing motivation, think about the consequences of failing. Research has shown that we’re better at running away from unsettling situations than toward pleasant ones.
So, whenever you catch yourself wondering whether to buy that new pair of shoes instead of setting aside the money, pause for a moment and focus on the negative consequences of your action.
This budget motivation trick might sound counterintuitive but it works.
Let’s see an example.
If you buy a new pair of shoes, you’ll exceed your weekly spending budget. As a result, you won’t be able to reach your monthly savings goal.
Ultimately, you won’t save enough money in time to go on your dream vacation. You’ll spend another summer at work while everyone’s at the beach.
See how that works?
You already put away your credit card, didn’t you?
Divide Your Total Budget Into Smaller Categories
When you’re creating a budget, include all of your expenses—even the small ones. Every penny counts when you’re saving money.
If you allocate a budget to all your spending, you’ll be less likely to go over it. So, try to organize your money in the best way possible.
The most common budget categories are:
- Fixed expenses: These are expenses that remain constant each month, such as rent or a car payment.
- Variable expenses: These are spendings that are still predictable but vary slightly from month to month, such as groceries or entertainment.
- Debt payments: These are payments you make each month toward your student loan or credit card bill.
- Emergency fund: This is money you save to cover unexpected costs, such as house repairs or medical bills.
Next, break your budget into smaller subcategories. For example, your fixed expenses might include housing, transportation, and insurance.
Your variable expenses could be subdivided into food, clothing, and entertainment. And your debt payments might contain categories like student loans, credit card debt, and car loans.
Make Sure Your Budget Reflects Your Goals
It can be difficult to stick to a budget if you don’t have something specific to work toward.
So, set clear savings goals and prioritize them.
First, think about what you want to do in the future. Do you want to go on vacation, buy a house, or save for retirement?
To start with, pick one or two things to budget for.
Once you have a goal in mind, determine how much you need to save and what your timeline is. Then, calculate what you can set apart each month and whether your deadline is feasible.
If your budget doesn't reflect your goals, it'll be much harder to stick to it.
So, you might have to change the amount or the deadline. Alternatively, you can think of ways to earn or save more.
In addition, try breaking down your savings goal into smaller targets. Instead of just saving for emergencies, set apart some money for car repairs, medical bills, and unemployment.
Focus on the progress you’re making each month and celebrate the little milestones.
This will keep you motivated and help you stay on budget.
Make Changes as Needed
Budgeting is an ongoing process and as such, it is bound to change over time. Your goals and needs will vary, and so will your income.
Your budget should reflect that.
Even if nothing’s changed, if your budget isn’t working, don’t be afraid to tweak it until it does.
Additionally, it's important to review your financial plan periodically to maintain your motivation. After all, how to set a budget and stick to it if you're not seeing any progress?
Stick to a Routine
One of the best ways to save money is to develop good spending habits. And making a habit takes time, so be patient.
Create a routine and stick to it as much as possible. Here’s how you can do that:
- Set daily, weekly, and monthly goals and keep a list of your expenses. That way, it’ll be easier to keep yourself accountable.
- Check your budget regularly to ensure you're still on track. This will help you stay motivated and make adjustments if necessary.
- Mark your progress. Seeing how far you've come can be a great motivator.
Don’t Be Afraid to Ask For Help
If you don’t know how to set a budget and stick to it, don’t be afraid to ask for help.
Family and friends can be a great resource for support and advice. You can:
- Set a budget together: It’s particularly important to create a plan together with your family if it’s for the household finances. But creating separate budgets with friends can be useful too. You can motivate each other.
- Share your goals with your loved ones: Let them know what your financial goals are, and ask for their support. They can keep you accountable and help you reach them.
- Ask for advice: If you’re wondering what the best way to create a budget is, ask your family and friends for their advice. They may have some helpful tips that you haven't thought of.
- Celebrate your successes: When you reach a financial goal, be sure to celebrate with your family and friends. They'll be happy to celebrate your success, and they might even have some ideas for fun, budget-friendly activities.
Look for Online Resources
The best way to learn how to stick to a budget is to educate yourself. There are many online courses and books from financial experts.
If you need more personalized advice, consider meeting with a financial advisor. They can help you create a budget that's tailored to your specific needs.
Last but not least, there are plenty of tracking apps that can help you stay on budget.
In addition to monitoring your spending, you can use them for suggestions on how to save money.
Look For Ways to Reach Your Goals Faster
There might be times when you feel like you’re not progressing quickly enough. Instead of getting desperate, you can use these as a motivation to increase your earnings.
There are numerous creative ways to make extra money. Here are a few examples:
- Start a side hustle: You could create a blog, do freelance work, sell your art, and so on.
- Sell unwanted belongings: You can sell things you don’t need, such as your old clothes, on websites like eBay or Craigslist. It is easier than you think.
- Participate in paid surveys: There are many websites that offer money in exchange for as little as filling in an online form.
- Do odd jobs: You could walk dogs, mow lawns, pet sit, and so on.
- Earn cashback: You can earn cashback by using credit cards that offer rewards. You can also shop through websites like Ebates.
- Save your raises and bonuses: Whenever you get a raise or bonus, put a portion of the money into savings. This will help you reach your savings goals faster.
So, you’ve made the decision to start budgeting. That’s great!
But it can be tough to get started—especially if you don’t have a lot of experience with it. And it can be even harder to follow the plan.
Thankfully, we have plenty of tips for how to stick to a budget in the long term.
Follow our suggestions above to stay motivated to keep working toward your financial goals.
Budgeting can be fun and easy!
With an eye for research, Aleksandra is determined to always get to the bottom of things. If there’s a glitch in the system, she’ll find it and make sure you know about it.