By Jennifer Tucker
June 27, 2023 | 2 Min. Read
The phrase “stick to a budget” might make you think of restricted spending. And let’s face it: restriction can be a recipe for failure.
If you think it’s too hard to stick to a budget, you’re not alone. In fact, a survey found that 73% of Americans say they don’t regularly follow a budget. But budgeting can help you control your spending, avoid debt, and gain financial freedom.
Creating a monthly spending plan doesn’t mean you have to take drastic measures to reduce your expenses or increase your savings. Even small changes in the way you manage your money can make a big difference to your financial well-being. So, how do you budget effectively and create a spending plan that you can stick to? Here are 7 tips.
Your budget should match up with your current financial situation and future goals. A budget that is overly aspirational or too restrictive will be difficult to follow, and you may be tempted to abandon your plan.
Tracking your income and expenses can be a lot of work. Download a budgeting app or budgeting template spreadsheet, or use one of our free online budget calculators to help.
It can be easy to overspend and accumulate debt when you pay with credit cards. Instead, try to pay with cash or a debit card. This can help you stick with your budget by only spending what you have.
Decide how much money you want to set aside in savings each month, then set up an automatic transfer into your savings account. This can help you avoid the temptation to spend money you should be sacking away.
Consider your short-term and long-term financial goals. With a specific objective in mind, you may be more motivated to stick to your plan and make smart financial decisions. Celebrate milestones along the way to reinforce the good financial habits you’re building!
When it comes to expenses, it’s important to distinguish between what’s essential and what’s discretionary. Prioritize your spending to ensure you’re focused on the necessities while leaving yourself a cushion of “fun money,” too.
Share your budgeting goals with a friend or family member. Talk with them about the challenges you encounter and the milestone you meet. Having someone on your side who will hold you accountable and cheer you on can help you stay on track.
Sticking to a budget requires discipline and commitment. It can take time to build healthy financial habits, but with a little determination and perseverance, you’ll find the peace of mind that comes with effective budgeting.