If you have ever found it hard to stick to a budget, you’re not alone. Many people find it tough to set money aside for the future. A budget helps you save for emergencies, pay off debt and even plan for retirement. In short, it helps you reach your financial goals.
Budgeting doesn’t have to be difficult. A few small adjustments here and there can take you a long way. So if you are struggling to stick to your budget and make saving a priority, here are a few quick tips.
1. Set detailed goals
What’s the point of a budget if you don’t have goals? Goals help you stay on track. You wouldn’t get in the car without a destination in mind, would you?
Before you build a budget, write down your goals. Be as detailed and specific as possible. Set short-term goals you can reach within a year and long-term goals that take a year or more.
Keep your goals somewhere you will see them every day. This reminds you what you are working toward and keeps you motivated to stick to your budget.
2. Track your spending
Try tracking every expense for a week or more. You will get a clear picture of where your money goes and notice any habits that are costing you. Then you can adjust your budget in a positive way.
Tracking your spending can be eye-opening, and it is often the first step to changing your money habits for good.
3. Prioritize saving
Before you pay any bills, save. Many people find saving hard simply because they save whatever is left at the end of the month, and often nothing is left. Pay yourself first instead. If you don’t have an emergency fund of 3 to 6 months of expenses yet, that is a great place to start.
A common guideline is to save 10% to 20% of your income. If that feels out of reach, start with a smaller amount and raise it a little every month. After a while you won’t even miss it, and saving becomes a habit. Our savings calculator shows how regular deposits add up over time.
4. Use your cards to see your spending
Paying by card leaves a record of every purchase, so you can see exactly where your money goes. Your banking app shows all your transactions, and many sort them into categories.
Some credit cards also offer rewards. If you use a credit card, pay the full balance every month so you don’t pay interest. If you use a debit card, make sure you don’t pay extra fees.
5. Try a money challenge
Money challenges are a fun way to boost your savings and change your spending habits. They make you take a closer look at how you spend money, and there are countless ones to choose from.
Popular ones include a no-spend month or saving your spare change. Find a challenge that fits your lifestyle and goals, and invite friends or family to join you. Doing it together is much more fun than going it alone.
6. Give the 50/30/20 rule a try
If staying organized is your biggest budgeting struggle, the 50/30/20 rule may help. It splits your income into three groups: needs, wants and savings.
- 50% of your income goes to needs and fixed expenses, such as rent, utilities and health care.
- 30% goes to wants, such as entertainment, eating out or a vacation.
- 20% goes to your goals, such as savings, retirement or paying off credit card debt.
Want to see the numbers for your own income? Try our 50/30/20 budget calculator.
7. Find the right tools
Keeping a budget with pen and paper can get tedious, and it is easy to make mistakes. A budgeting app helps you review your spending and see how your money flows into each category. Some apps also remind you to stay on track.
In Spendee, for example, you can connect your bank or add expenses by hand, set one monthly budget and split it into category budgets, and see where your money went in Overview.
8. Find your own budgeting style
There is no single right way to budget. Everyone has different needs and goals, so find the style that works for you. Here are a few to consider:
- Envelope system: You create an envelope for each budget category and fill it with cash. You only put in what you want to spend on that category. Once the envelope is empty, you stop spending in that category. You can use digital envelopes for fixed expenses if you prefer.
- Reverse budgeting: If you have one goal you are serious about reaching soon, try reverse budgeting. You put money toward that goal first and pay your bills from what is left.
- Zero-based budget: Every dollar you earn gets a job. You decide exactly where all of your money goes, so income minus spending and saving equals zero.
9. Work together with your partner
Creating a budget and sticking to it can be easier if you do it with your partner. Working as a team helps you both stay on track, and it can even make budgeting a bit more fun.
The more good money habits you build together, the easier it will be to reach your shared goals.
10. Adjust when you need to
Life happens and unexpected expenses come up. It’s okay to adjust your budget for extra costs or changes in your life. A small cushion in your budget makes these changes easier.
At the end of each month, review how you did. Did you spend more in one category? Did a car repair eat into your emergency fund, so you need to save more next month? Wherever you end up, look at your budget again and make sure it is still realistic.
The bottom line
Budgeting doesn’t have to be hard. There are plenty of ways to make it work for you and get closer to your goals. Find what fits your life, and you will be one step closer to financial success.
This piece was written by Ashley, a personal finance writer and content creator.