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You planned ahead.
You wrote it all down.
You finally started a budget!
Your financial hopes and dreams were about the come true!
But 1 week later…
You lift your budget high in the air and rip it into a MILLION pieces…because “this budget doesn’t work!”
It. Is. FRUSTRATING!
Today I want to show you that not only can you stick to your budget, but you can do it EVERY MONTH, and achieve your financial goals LIKE A BOSS!
If your budget isn’t working, I’ve put together the top budgeting tips for beginners to keep you on track!
1. Keep It Flexible
Let’s get this out of the way right up front. Your budget will NOT be the same, month in and month out. YOU ARE NOT A ROBOT* (if you are a robot, please disregard and skip to the next section*).
Your life is always in motion, and your budget should be too.
PLEASE do not stress if what you planned at the beginning of the month looks drastically different at the end.
Which means when something unexpected happens, you can adjust on the fly and be on your way (another reason I love my budget template!).
You overspent on groceries? No biggie, just backfill with some funds from your clothing budget, and forego the new sweater. DONE!
The definition of “sticking to your budget” is planning your spending before the month begins, making ALL money decisions based on that plan and not overspending.
It’s not about predicting the future, it’s about keeping your spending in line with your goals.
And speaking of…..
2. Set Personal Goals
If you are just starting your budget, you need to set some goals. Your budget is WORTHLESS without goals that ROCK! Your goals should be what motivate you to get out of bed in the morning.
To stick to your budget, you need to remember your WHY.
You started this journey for a reason. I recommend writing down your goals and hanging them somewhere you can see EVERY DAY. Keep that fire burning so you remember WHY your budget is so important to you!
I have heard from THOUSANDS of you, and here are just a few of the goals you have told me you REALLY WANT TO ACHIEVE:
“I want to be a stay at home mom“
“I want to STOP living paycheck to paycheck and STOP stressing about money every month”
“I want to get out of credit card debt forever, and live DEBT-FREE!”
“I want to KILL my Student Loans FAST!”
“I want $50,000 in my savings account!”
Remember, the BUDGET IS NOT THE GOAL, but simply a powerful tool to help you ACHIEVE YOUR GOALS.
3. Be Realistic
The #1 budget killer is creating one that is not based on your TRUE spending habits.
It’s tempting to try and cut your spending drastically right away so that you feel like the budget is “worth it”, but all that does is increase your disappointment when you blow the budget.
Instead, create your budget so it lines up with YOUR ACTUAL SPENDING from the previous 3 months.
- Go through your previous credit card and bank statements, and total up what you spent in each category.
- Divide by 3 (months) to get your average spending.
THIS IS YOUR STARTING BUDGET.
You can follow this exercise in more depth on my How To Start A Budget guide.
Once you have a more realistic budget set up, now you can take a more tactical approach to saving money.
Talk about HOW you are going to save money in each category, and then you can reduce the budget at that point.
Quick Tip: I recommend starting with my list of Simple Ways To Save Big $$$
4. Plan Ahead
Now that you have a realistic budget, and kick-@$$ goals that REALLY matter to you, you want to schedule a recurring monthly budget meeting.
The goal of this meeting is to review the previous month, check in with your goals, and plan next month’s budget.
Every month is DIFFERENT, so it’s a great idea to go through each line item to make sure you know what to expect. I highly recommend opening up your calendar during this meeting to talk about any events that you have planned.
Are there any birthday parties you are attending? Weddings, celebrations, vacations, sports, concerts, etc.? Are there any irregular expenses coming up?
Things such as car maintenance, insurance premiums and medical bills do happen, so make sure those are included in the budget as well.
Ensure you plan what you will spend on every event for the month so you can make sure it’s all accounted for.
Quick Tip: One of the BIG keys to keeping on track is planning for these irregular expenses and events ahead of time so they don’t kill your budget.
I recommend saving for them in separate savings accounts called “Savings Buckets.” (I personally use CapitalOne 360, they make it CRAZY easy)
Essentially these are accounts that you put a small amount in to each month, so when the expense or event occurs, the money is already saved and it DOES NOT AFFECT YOUR MONTHLY BUDGET at all!
You can learn how to build your own Savings Buckets into your budget in my “How To Budget” video below
5. Track Expenses DAILY
The quickest way for your budget to get out of hand is to NOT USE IT.
This may seem ridiculous, but most people give up on their budget before they actually use it.
They put the numbers on paper, and then refuse to track their spending or make decisions based on what is in the budget. And then they wonder why they can’t get their money on track, and they say, “budgeting is worthless.”
This is like buying lumber, a hammer and nails, and then wondering why the deck isn’t being built.
You need to pick up the hammer and swing it!
You budget is a heavy-duty tool for getting your money on track, so USE IT!
I’ve built this directly into my Free Budget Template. Simply use the “Transactions” tab and enter your daily spending!
Every time you want to make a make a purchase, just open the budget and see what is available. If the money is there, then make the purchase and PUT IT IN THE BUDGET.
It’s as simple as putting in the Date, Amount, and Category. You can then instantly see how much you have spent in that category, and what is left for the month.
This is how you build better money habits.
I recommend inputting transactions immediately. But if you can’t, simply collect the receipts and input at the end of the day.
Quick Tip: You can do this all from your mobile phone (using my Google Sheets template), or on paper.
6. Use Cash Envelopes
When I first started budgeting, for the life of me I could NOT ever stick to my budget. It was more of the ready, shoot, aim approach.
I would spend money first and THEN look back at where it was going, instead of reviewing my budget BEFORE spending the money to see if I actually had any!
My first budget success came when I restricted myself to using CASH ONLY for discretionary spending. This is a powerful method! Here’s how it works in real life:
How To Use Cash Envelopes
Divide your money into spending categories for the month. This should include, Groceries, Restaurants, Entertainment, Spending Cash, Date Night, or any other DISCRETIONARY SPENDING that you do each month
- Label a set of envelopes with your categories
- Fund each envelope with the budgeted amount, putting the cash in each paycheck
- For groceries, I recommend filling it weekly to get in the habit of planning one shopping trip per week
- When the money in the envelope is GONE, you can NOT LONGER spend money in that category
- This forces you to be creative in not only how you are spending the money, but how you get by once the money is gone
This is a simple way to build good spending habits FAST, and makes it nearly IMPOSSIBLE to overspend.
7. Wait Until Next Month
This is something that gets discussed in our household ALL THE TIME. Here’s how the conversation typically goes:
Me: “Man, I really want to buy XYZ Thing on Amazon right now. It would be so awesome!”
Wife: “Cool. How’s the “Spending Money” category?”
Me: “We’ve got $0.35 left.”
Wife: “Sounds like a ‘wait until next month’ item, right?”
Me: “But it’s so cool and will make life so awesome if I buy it right now and…”
Wife: “Except not. Life will NOT be awesome if we blow the budget. Calm your cookies and wait another few weeks to buy it.”
Me: “Wifey Wisdom for the win! I’ll just add it to my Amazon Wish List. DONE!”
Wife: “Team Wade?”
Me: “Team Wade!”
I get it. With the THOUSANDS OF WAYS to spend money instantly right from your couch, it’s hard to practice “delayed gratification.”
But YOUR GOALS are far more important than whatever it is that you want to buy in the moment.
Practicing the word “WAIT” in your house will do wonders in helping you curb impulse spending and keep you from blowing the budget.
Every time I decide to eat healthy, I am reminded that there are “occasions” every single month.
Holidays, birthdays, Wednesday…. these are all “excuses” that I use to cheat on my eating plan and stuff my face with garbage food.
The same applies to your budget. There is always a reason to spend your money. You will always find an excuse.
So what are you going to do about it?
Instead of asking yourself “what’s the bare minimum I can do” to get it done, I would challenge you to instead ask “what is the MOST I can do here?”
Don’t settle for anything less than TOTAL control over every dollar you spend!
Your budget is a Roadmap to Financial Freedom. And with a little practice, you CAN stick to it and hit your goals!
You got this!