You spent time and energy creating it, but how do you actually stick to your budget? Below I reveal some easy tricks and strategies to help you stick to your budget so you can achieve your financial goals.
Before I get into ways to stick to a budget, let me first answer two questions that I get asked often: What exactly is a budget? and Do I need one?
What is a budget?
A budget is plan that assigns a job to every dollar you get.
Some jobs for your dollars include paying bills or paying down debt, investing, sitting in a bank account waiting to pay future bills or expenses, sitting in an account waiting to be spent on goals, and hanging out in your wallet ready to be spent on fun stuff.
Your budget tells your money what to do and how you want to spend it.
Do I need a budget?
Yep. I believe 99% of people need a budget and everyone could benefit from having one, whether you have $3,000 coming in each month or $30,000.
Everyone needs to know how much money they have left over after saving some and paying for the necessities: food, transportation, clothing, housing, insurance, debt, and utilities.
If you don’t know how much your necessities cost, how do you know how much you can safely give away, invest, or spend on fun stuff?
Okay, so you’ve got a budget. Now how do you stick to it?
Below are 9 strategies to help you stick to your budget and spending plan.
1 – Make an accurate spending plan.
The biggest reason you can’t stick to your budget is most likely because your budget—or planned spending—isn’t accurate.
How often have you budgeted your money for the coming month only to go over budget almost immediately?
Before I got the hang of budgeting, I would set out my plan for the next month. I’d figure out how much I wanted to spend on groceries and estimate all my bills that fluctuate each month, like electricity and gas for the car.
I’d put those amounts in my budget. Everything would balance out: money coming in would be equal to or more than money going out.
I’d give every dollar a job, just like the budgeting gurus tell me, meaning each dollar was going to pay a bill or to pay for something I wanted or it was going to savings.
Woohoo! Look at that pretty budget where my expenses are less than my income. I’m going to save money this month, baby!
Then, the new month would start. A fresh start. A new beginning!
I was eager to stick to my budget. And I was committed. No extra trips through the Starbucks drive-thru or ordering food delivery just because I didn’t feel like cooking from my stocked fridge.
And then you can probably guess what happened.
I’d get the car insurance bill in the mail a few days later—darn it! I forgot that bill comes in October.
Or my daughter would decide she really wants to join the school’s basketball club. For $125 (!!). And for “club ball” she needs special shoes? Sheesh, they’re FIFTY dollars?!
Or something completely unpredictable would happen, like the dog would injure her toenail playing fetch in the house. (How does that even happen?)
To stop the bleeding and prevent infection, there goes ANOTHER $125, this time for vet care and medicine.
Just a few days into the month, I’d blown my budget. (All of those things really happened, by the way.)
And by the end of the month, every budget category’s amount was wrong. I’d either under or over budgeted in every category.
Like the $700 I budgeted for groceries. Way UNDERestimated. (How can four people eat that much?)
The $150 for gas. OVERestimated.
But you know what I learned?
The problem isn’t budgeting itself. The problem is accuracy. You can’t stick to something that’s not accurate.
And my budget wasn’t accurate for two reasons:
First, like most people, I’m a terrible estimator. It’s hard to predict how much some things are going to cost each month unless we look at past spending to make our estimates.
Throw in a couple unexpected expenses like the vet trip, and your budget feels like a joke, like the beard my husband tries to grow every No-Shave November.
Second, our bills fluctuate. Not only does the electric bill change from month to month, but we also pay some bills and other expenses only occasionally.
Gifts, insurance, vacations, holiday stuff…all those “once in a while” items can blow our budget if we haven’t planned for them. Especially since every month seems to have at least one “once in a while” expense come up.
To make an accurate spending plan and not bust your budget, your budget must account for all your bills and expenses, both monthly and occasional.
2 – Let go of perfectionism.
You’ve heard of “impostor syndrome,” right? That feeling of not being good enough. Or feeling like you’re a fraud.
I teach people how to budget, so just a few minutes ago when I found a major oversight in my budget, I felt like a big fraud.
How could I have forgotten to include a quarterly bill that’s coming due next month in my budget and that I’ve been paying every quarter since 2001? It’s a few hundred dollars, and our budget is tight. So it takes some planning to cover an expense of that size.
In reality, I’m pretty good at budgeting. Our debt-free, live-below-our-means lifestyle lets us do stuff like send our kids to the private schools of their choice. Most of the kids they go to school with have parents with incomes two times (often 3 to 5 times!) higher than ours.
If I wasn’t a good money manager, there’s no way I’d be able to swing private school tuition for even one kid, let alone two.
So I made a mistake and messed up with the bill. I’m human.
But I know I’m not alone in expecting perfectionism of myself.
What’s worse is that you might not even see that it’s perfectionism that’s frustrating you and derailing your efforts.
Not budgeting perfectly causes people to quit. All the time.
People say budgets don’t work often because they couldn’t execute their spending plan perfectly.
But there is no “perfect” when it comes to budgeting.
I put together my spending plan every month. And within days, I’m moving money around. And that’s okay!
Budgets can change. Seriously. You can change your budget as often as you like.
It’s your money and you’re in control of how you spend it.
3 – Set exciting goals.
My daughter dreams of going to Spain. And I dream about taking her there…strolling the streets and gazing at the cathedrals and castles, flamenco dancing, the beaches, paella, practicing our Spanish.
The price is hefty for a family of four to experience all Spain has to offer. But going to Spain is a goal that I’m excited to achieve.
So when I’m making choices about how to spend my money, I keep that goal front and center.
Do I really want to spend $50 on dinner out in my home town, or would I rather save that money for dinner in Barcelona? Could we warm up leftovers or just eat sandwiches since I don’t feel like cooking?
The choice is easier and feels less like a sacrifice when I’m trading a mediocre restaurant meal for Spain.
Your goal doesn’t have to be a vacation 4,000 miles away to qualify as exciting. The peace of mind and financial security that comes with being debt-free or having six months of expenses stashed in an emergency fund certainly qualifies.
4 – Set spending limits but don’t deprive yourself.
You know when you start a new diet that makes you count calories and you’ve eaten the day’s allotment by lunch time? And you have to decide whether to starve or blow your diet when dinnertime rolls around?
That’s often what a budget feels like by the second week of the month: do I blow my budget and overspend in a category, or do I suffer?
But a budget is not a money diet. It shouldn’t feel restrictive and suffocating.
Your budget should support your goals. So if your goals require a lot of money, you’ll automatically want to cut back in other areas to free up cash.
Some people laser-focus on their goals, so much so, that they decide they’re okay with eating beans and rice, selling almost everything they own, and delaying the purchase of all “wants.”
I’ve seen people quickly pay off $100,000+ of debt this way because the pain of being in debt was far greater than the pain of living a meager existence for a couple of years. That’s amazing!
But other people rebel against that kind of laser focus. Their goal—getting out of debt or saving for retirement or even saving for a dream home—is not enough to make the pain of eating just beans and rice or giving up lattes worth it.
If you feel deprived, you need to cut yourself some slack. Because if you don’t, your inner rebel may tell you to “f%&^ off!” and go on a spending spree.
I allow myself a set amount of money every month to spend it however I want. No questions asked. This is my fun money.
So if you’ll feel deprived and tempted to say “screw this budgeting stuff” if, for example, you don’t get your daily latte, give yourself enough fun money for your fancy coffee drinks every day.
5 – Bring the future closer.
One of the main reasons for sticking to a budget is so that our “future self” will be well taken care of.
We save in a 401k or IRA so our future self won’t have to eat dog food in retirement.
We pay off debt so our future self will have more money to spend on things that make life worthwhile and enjoyable.
We save for a house so our future self will have more space and comfort.
But our “present self” has to sacrifice so that our “future self” is happier and more secure. And often the future feels so far away that it’s hard to care about it.
People who are more impulsive and live in the moment have the most difficulty with delaying purchases and saying “no” to things they want right now.
But if you can make the future feel closer to the present, you’ll care more and it’ll be easier to sacrifice now so the future will be better.
Below are two ways to make the future not feel so far away.
Get to know your future self.
The more you know and like your future self, the more likely you’ll want to take care of her. So if you can clearly picture how meeting your goal of building an emergency fund or saving for a house or building a retirement nest egg can benefit your future self, you’ll be more motivated to do the required work to meet your goal.
Really picture yourself in 1, 5, 10, or 20 years. What will you be like? What kinds of things will you do in your free time? Think about your future self as if she exists now and imagine all the details. Make her likable and really get to know her so that you care deeply about her.
The most important thing is to make your current self feel close to your future self, like she’s your best friend. Picture her as being similar to you and likable, and fill in as much detail as possible.
Clearly picture the future.
How will your life look after you’ve reached your financial goal? Think about the details and the emotions. How will you feel? Relief, peace, satisfaction? What will be different about your life? Jot down your ideas or just some words to describe your future life.
If you’re a visual person, make a “dream board.” If you’re more of a wordsmith, write down in detail what your life will be like. Or have your future self write a thank-you note to your present self describing all the wonderful things in her life thanks to the financial work you did.
Hang up the dream board or letter somewhere you’ll see it throughout the day. Remember to pause to look at it a few times a day and immerse yourself in that future life.
6 – Create spending roadblocks and barriers.
If the other ideas don’t kill your spending temptation, then make it as hard as possible to spend money on “wants” that you didn’t budget for.
Use cash instead of credit cards. Or use a debit, rather than a credit, card. (Just make sure you record transactions and keep track of your account balance.)
You can use the envelope system where each category (groceries, gas/transportation, dining out, etc.) gets its own envelope with cash for the month. When the cash is gone, you’re done spending.
Close your credit card accounts. Call each credit card company and tell them to close your account. Then cut up the card.
If you have an account balance that you are working to pay down, customer service may say they can’t close the account. In that case, tell them to put a freeze on your account and decline any future transactions. Then tell them to set up your account so that it closes when the balance hits zero.
If you can’t bring yourself to get rid of a credit card, freeze the cards. Literally. Fill a gallon storage baggie or jar three-quarters of the way with water, submerge the credit card, and freeze it. You’ll have to thaw the card to use it, which will give you time to think through the purchase.
Or give your credit cards to a trusted friend and tell her not to give them back unless it’s a true emergency (for example, an illness or accident).
Challenge yourself to wait 24 hours before any purchase you didn’t budget for. When the 24 hours is up, see if you can wait another 24 hours. Keep delaying your purchase as long as possible.
If you still want the item after a waiting period, try to find it for free or at least used.
Then, put two reminders on your phone or calendar:
- If you bought the item new, the first reminder should be three days before the return window closes. Check in with yourself and see whether you’re okay with returning the item for a refund.
- The second reminder should be set for three to six months from the purchase date. Do you still love the item? Are you glad you purchased it? If not, remember this experience the next time you have the urge to spend money you didn’t plan to spend. And sell the item if you no longer want it!
Make a wallet card “spending stopper.”
On a small card, write down:
- Your 3 most important values
- Your exciting goal
- 3 things you’re grateful for
- At least 3 things you could do rather than shop, especially if you shop to make yourself feel better after a bad day
- Questions to ask yourself before spending: Is the purchased aligned with your values? Will the purchase move me closer to my goal or farther away? What will I have to give up so I can afford this? Am I shopping because I don’t feel my best?
7 – Recognize when your ego is depleted.
Sarah Newcomb writes in her book “Loaded”
“ shop for fun. We shop to feel better. We shop for social connection. We shop to buy things that help us feel more like the person we want to be. We shop to fulfill our sense of identity.”
Newcomb suggests that the things we buy get incorporated into our sense of self.
This is why the elderly find it difficult to part with belongings that they don’t need or why people feel personally violated when someone steals from them.
And this explains why letting go of things from a hurtful past can be so freeing since it can allow you to fully embrace your new self.
When you have a really bad day and your psyche is bruised and beaten, shopping can make you feel more like the person you want to be by purchasing something that fits with that identity.
In addition, we need to take care of our physical needs because when we’re overly tired, hungry, or stressed, our self-control resources are depleted. Lower self-control means we have more difficulty saying “no” to purchases.
Newcomb suggests using affirmations to resist the urge to engage in retail therapy. Yep, affirmations. But science supports this suggestion.
When we experience a loss or rejection, our ego is depleted. When our ego is depleted, we may be tempted to shop to try to feel better.
Research has found a few minutes of affirming core values can reverse ego depletion. When we focus on what’s important to us (our values), we restore our sense of identity and recharge our reserves of self control.
Write down three of your most important values, what’s truly important to you (being in nature, honesty, your family, etc.). Carry these in your wallet. The next time you feel tempted to spend to try to make yourself feel better, read your values.
The values will remind you of your true self and help restore your ego so that shopping, at least for ego replenishment, will be unnecessary.
8 – Reward yourself.
Did you NOT buy something you wanted this month because you’re determined to stick to your spending plan?
Or did you find a way to cut expenses?
Or maybe you bought something you truly needed but you found it used, rather than new, or you found a way to get it for a discount rather than paying full price?
If so, it’s time to celebrate!
It might seem counter intuitive to reward yourself for not spending money by spending money.
But, especially in the beginning, it’s important to acknowledge the effort you’re putting toward budgeting.
And you can find ways to celebrate for free: attend a free event, take a pretty hike, or have a picnic in the park.
But it’s also okay to enjoy something that costs money. Just try to stick to inexpensive stuff: a new nail polish, tea, scented lotion, or bath soap. Or a new audiobook or paperback.
Stick to your budget for 3+ months? Maybe something bigger is in order, like dry-aged steaks instead of chicken.
Small monthly rewards and celebrations will help keep you motivated and keep feelings of deprivation at bay.
9 – Know your “why” and remind yourself often.
My goals help me stick to my budget and make good choices, but going to Spain isn’t the real reason I budget.
I want to take care of my kids as best as I can. And I want to avoid becoming a financial burden to my kids in my old age. Those are the reasons why budgeting and spending my money wisely now are so important to me. This is my “why.”
Define your why and remind yourself often why good money management is important to you.