Tips for Sticking to a Budget

Managing money wisely requires the right mindset, especially when it comes to sticking to a budget. After all, life does come with a lot of expenses and when surprise expenses arise, it's easy to fall off track and overspend if you don't have a plan. However, with the right mindset and knowledge base, it's possible to successfully stick to a budget and achieve your financial goals. In this article, we provide useful tips on how to stick to a budget. Whether you're trying to save money for a big purchase or simply want more control over your finances, these tips will help you stay on track and reach your financial goals.

Tips for Sticking to a Budget.

If a budget is telling your money you are in charge, sticking to a budget is showing your money you are in charge.

1. Know Your "Why"

Why are you trying to save more money, pay off your debt, or just get better control over your money?  What is going wrong that is causing you to look for answers?  Do you want a better quality of life?  More financial peace of mind?  Knowing your "why" and focusing on it will help you make the hard choices when they need to be made.  Some years ago our family was on a journey to pay off all of our debts.  We were sick and tired of living paycheck to paycheck and having little to show for it.  We wanted a better life and more personal peace.  Since we knew that personal financial peace would come thru being debt free we used that as motivation when difficult choices needed to be made.  And it worked. Knowing our "why" helped us steer our money and decisions toward our goal even when temptations arose.

We wanted financial peace of mind in the present, protection from emergency expenses, and the ability to fund important priorities such as education, paying off our home, and saving for retirement.  This was our "why".  Once we had these goals and priorities in focus, we simply pointed our money and efforts in that direction.  Know your "why".

2. Use a "Zero-Based" Budget

A zero-based budget is important because it forces accountability over how you are choosing to spend every single dollar.  You may have tried in the past to "budget" by writing down how much you plan to spend in certain categories for a month, however, if the budget you are creating is only a loose collection of how much you plan to spend it misses a key element:  You haven't weighted it against your income and assigned every dollar of income a job.  The dollars of income that are not assigned to a job are likely to walk away, or at minimum, they'll be directed toward the wrong target.  You know that you have assigned every dollar a job when your income minus your expenses equals zero. Zero does not mean that you have no money left, it means that you have no money unassigned to a job.  There is a big difference.  It means that all of the money you earned is pointed toward a goal such as paying bills, saving, investing, and/or paying down debt.  When you have assigned a job to every dollar of income, you have forced yourself to put those dollars where you have pre-determined they should go. This is accountability.  Get a free zero-based budget pdf template here.

3. Don't Get Frustrated Too Soon

Don't try to do too much in the first month.  Is your heart set on getting out of debt or taking charge of your money?  That's awesome!  Just remember that zero-based budgeting is learning a new skill.  Similar to taking on a new exercise routine or hobby you are best served to leave yourself room to learn and improve.  So if the first couple of months is not perfect that's okay.  Learn and keep moving forward.  You'll be a budgeting pro in no time.  Give it at least 3 monthly budgeting cycles to build momentum.

4. Plan Your Meals

For many people, the single biggest driver of discretionary spending is food.  Yep.  Food.  By that, we mean groceries and restaurants.  So if you don't keep a close eye on the grocery and restaurant budget it can get out of hand fast.  So plan those meals.  Not every night can be seafood.  A good ol' fashioned taco Tuesday never hurt anyone.  If you plan your meals BEFORE you go to the store, you'll be able to fill up your cart with groceries that are more likely to be on budget.

Restaurants (or any food you paid someone else to prepare or serve) are the single biggest savings opportunity.  Want to make progress fast on saving more money?  Stay out of restaurants, fufu coffee shops, and cafes.  Do this faithfully for 1 month and you'll discover big dividends.

5. Check Your Budget Frequently

By frequently we mean daily.  If you really want to be successful you have to know your numbers!  That means checking in daily or at minimum 4 times a week on your spending.  Record those expenses, see how much money is left in your budget, and behave accordingly.  Doing this little by little will help you from overspending your budget categories.  Get a free zero-based budget pdf here.

6. Consider Your Social Calendar

Peer pressure is the enemy of diets and budgets.  Are co-workers going out to eat?  Do friends want to meet for drinks?  That's all fine if you have the money in your budget but what if you don't?  Recognize that sticking to a budget will mean that you will likely need to adjust your social habits so tell your friends in advance (as needed) so that they know why you are declining some invitations.  Not all invitations will need to be declined but the ones that will cause you to overspend will need to be avoided if you are going to be successful.  Knowing this upfront will help you navigate the challenge.

7. Saying "No" Cannot Be Avoided.

Telling yourself "no" cannot be avoided.  So get used to it.  If you want to reach your goals, quit living paycheck to paycheck, or pay off all of your debt you'll have to learn to make yourself and your money behave.  This means telling yourself "no" will be required.  Budgets by definition are limited.  They have boundaries.  And if you are going to live within limits and boundaries, you'll have to understand that "no" is part of the process.

8. Choose What You Want Most Over What You Want Now

Choose what you want most over what you want now.  If you are like me what you want now is to go out to eat.  But what I want most is to be debt free and have financial peace.  So, I evaluate what I want now with my budget.  If it doesn't fit, I choose what I want most instead.  Choose what you want most over what you want now.

7 Steps to Financial Wellness

1. Save a starter emergency fund of $1,000 as fast as you can.
2. Pay off your debt. Start by listing all of your debts except for your mortgage. Put them in order by balance from smallest to largest—regardless of interest rate. Pay minimum payments on everything but the little one.  Focus on that one until it is gone. Then take that payment and put it toward the second-smallest debt, making minimum payments on the rest. That's what's called the debt snowball method, and you’ll use it to knock out your debts one by one until you are debt-free except for the house.
3. Save a full emergency fund of 3 to 6 months of household expenses
4. INVEST 15% of your gross income toward retirement.
5. CONTRIBUTE to children’s college education fund.
6. PAY off the house early.
7. Build wealth and be generous.

Note:  Steps 4,5 & 6 are worked on at the same time.

Budget Coach USA

Learn to Win with Moeny

Budget Coach USA offers personal financial coaching to individuals and couples who are struggling with control over their income and expenses.  We help our clients establish family budgets, stick to them and work through common sense strategies for paying off debt and building the future they want for their families.  Why not schedule a free consultation today?