Do you ever get to the end of month and just stare in disbelief at your credit card statement? I don’t want to jump on the “latte is a budget breaker” bandwagon but the last few times this has happened to us it was because we let our spending on the small things get out of control
I can be way too easy some months to just get carried away. Eating out a couple of extra times – $200. Going out for drinks – $25. Buying a few want but don’t need items on Amazon – $100. Spending some extra money on a one-off expense around the house – $300.
Suddenly your credit card balance is $1,000 higher than last month and you’re left wondering HOW??
Luckily we have spent a TON of time working through sticking to a budget and training ourselves to spend mindfully.
That isn’t to say we don’t still have months where we stray from the path a bit but overall we have been able to keep these surprises to a minimum.
These Are Our 10 Tips to Help You Stick to A Budget Month After Month
First a disclaimer. Don’t try to take all of these on all at once. It can be easy to get overwhelmed and fall off the wagon. Set a goal to add one or two items a month as you slowly train yourself to a life of budget mastery!
1 – Set a budget!
This one should be obvious but for so, so many people a budget is something that just exists as an idea.
Whether you are a pen and paper, excel, or online app person find the method that works best for you and get to it.
Start with taking a look at your spending history over the past year.
Download a Personal Finance App
With these apps, you can download your transaction history and sort by spending category to see where your money is going every month.
The next step is to set a REALISTIC budget for each spending category.
Both Personal Capital and Mint have budgeting features or you could download a budget specific app like YNAB. Or just go the old (new) school route like we did and build a budget spreadsheet in Google Sheets.
We find that we have more success by manually looking through all of our spending categories each month and copying them over to our budget spreadsheet.
During the month we still track our spending in Personal Capital just so we can keep a finger on our spending pulse.
Remember to also budget for the occasional items during this process as well. These could include car registration, quarterly or annual taxes, car maintenance, travel, home expenses, etc.
We have a section in our spreadsheet to accrue for these expenses each month in a separate bucket.
2 – Start Using a Personal Finance App to Track Your Monthly Spending
Back before we got serious about our spending habits we would have months where I knew our credit card statement would be ugly so I would put off even looking at the balance until it was time to pay.
This led to us getting disheartened about our spending and not sticking to a budget.
Since then we have taken the steps to keep a closer watch on our spending throughout the month. We personally use Personal Capital and check-in at least weekly to review all of our account balances and our monthly spend to date.
This helps us keep an eye on our spending, offers encouragement as we see our net worth increase and also helps catch fraud early in the case of identity theft (something that just happened to us!).
3 – Ditch the Budget Leeches
Take a look back at your spending over the past year and make sure you’re not still paying for things you aren’t using.
For example, are you paying monthly subscription fees for gyms or services that you haven’t used in months? Are you paying for a premium tv package yet only watching Netflix?
These items can really add up over the course of a month and eliminating them can result in some early budgeting wins.
4 – Let Discretionary Online Purchases Sit in Your Cart for 48 Hours Before Buying
Online shopping is a category that we have typically been pretty good at keeping under control. Unfortunately, once the kids showed up in our lives this has kind of gone out the window.
Typically though the majority of our shopping is just for basic needs type stuff. Extra diapers, wipes, miscellaneous baby stuff, etc.
There are still those occasional days though where I’ll see a sale pop up and get a little too far down the online shopping rabbit hole.
My best way to combat this is to add everything I want to the online cart and then just leave it for a day or two. More often than not I’ll take a look back the next day and realize I don’t actually want to spend that much month on new clothes or whatever it may be.
Getting past that initial “it’s on sale so I’m actually saving money” excitement to the reality how much I’ll actually be spending is enough to curb these impulse buys. And for the few items where I still find myself saying that’s a good deal and worth the money, then I’ll go for it.
5 – Reframe On-Sale Purchases from How Much You’re Saving to How Much You’re Spending
This item ties in well with our previous tip of waiting at least 48 hours on discretionary purchases.
It is SUPER easy to get caught up in the excitement of online sales. Amazon on Prime Day. Almost any site on Black Friday. After Christmas sales. End of Summer Sales. End of Winter Sales.
It is impossible to spend any time online these days and not get bombarded by BUY NOW marketing.
Now don’t get me wrong there are good deals to be had during these sales on items you might actually need. We keep on eye on sales for our kid’s clothes or any items we’ve had on our list for a while and are just waiting for the right time to buy.
The budget killer is going crazy on items you don’t really need.
I have a hot glue gun that was an Amazon deal of the day probably two years ago still sitting unused in my shop.
It looked like such a great deal but now I just look at it and wonder why I spend the $10 or whatever it was on something that I thought I needed because it was “cheap”.
Now when we look at sales we try to reframe the marketing from how much we are saving to how much we are spending. Often the best way for this to work for us is to shop like normal, add items to the cart and go to the checkout page.
It is there where the reality of how much this little shopping spree is actually going to cost and we ask ourselves if the stuff we want to buy is actually worth it. Sometimes the answer is yes but more often than not it ends up being no.
6 – Discover Your Materialistic Identity
This tip requires a bit more introspection and can be a little alarming for some. When we look at ourselves and who we are we naturally associate certain material items as part of our image.
Who we identify as drives how we are marketed to. If you’re someone who goes to yoga and likes hiking you’ll probably be marketed to by performance apparel companies, health food stores and car companies pushing SUVs.
This leads to buying habits that help fulfill that materialistic identity.
As a family, we look at ourselves as pretty active and healthy. We like to cook good food, go hiking, drink good beer, drive a Surbaru, etc. The almost stereotypical Pacific Northwest family in a way.
Sometimes when I’m shopping I’ll find myself gravitated towards certain items that almost feel more like I’m buying them because they will let me do the things I think I should be doing rather than what I necessarily am doing.
This can be a tough mold to break free from. Evaluating who we are and how we are perceived by others is hard! And making purchasing decisions that may deviate from that identity can feel weird.
Ultimately though it can help you make more mindful spending decisions that will help you stick to a budget.
7 – Start Meal Planning
Restaurant spending, especially before our 2nd kid showed up, was often one of our worst monthly budget killers. While we do enjoy an occasional nice meal that could cost >$100 most of our restaurant spending was in the $25 – $40 range. But multiply that by going out 3x/week and suddenly at the end of the month, we’re looking at a total cost of upwards of $500!
And usually, these meals weren’t the result of wanting to go out and try something new. They were the “it is Wednesday evening and we don’t have anything in the fridge” meals.
We have found meal planning to be the best way to cut down on these impulse restaurant visits.
In our meal planning post, we outlined the best ways to get started meal planning and some of the tools we use to make it a bit easier to manage.
Essentially each Saturday we’ll start looking at meals to cook for the following week. I’ll then go to the store Sunday morning and begin meal prepping for the week. Sometimes this involves cooking 2 or 3 meals that day and sometimes it is just simple prep for easy to prepare meals we have selected for the week.
Doing this helps us better manage our grocery shopping by choosing meals with complementary ingredients, cuts down on our urge to dine out and reduces stress during the week by not having to think about what to make for lunches and dinners every day.
Overall I would estimate we have cut our monthly food budget by $300 – $400/month by meal planning!
8 – Stop Using Credit Cards for a Month
We have a post coming in a few weeks taking a look at some of the most popular budgeting strategies out there. One is the cash envelope system when you allocate yourself a set amount of cash for each spending category in your budget and that is all you have to work with for the month.
This greatly reduces the ability to overspend as you know exactly how much you have available to last the month.
Since switching immediately to this system may seem a little extreme for some a good first step would be to ditch credit cards for a month. Either use just your debit card and track your bank account closely or cash for all your spending for a month.
This can help you retrain your mind from “I’ll pay for that later” to can I afford it now.
While I don’t subscribe to the get rid of all credit cards theory I do think that training your mind to not treat them like an endless cash supply is incredibly important.
9 – Let Yourself Live a Little
When the New Year rolls around, check out your local gym and how many people are there. Then go back a month later and see how busy it is. Or take a look at Google Trends for search terms like weight loss or just gym.
Every year millions of people commit to making huge changes in their lives and quickly get discouraged within a month or two and quit.
This is often the result of taking on too much, too fast and not trying to make realistic, incremental changes in their lives.
The same goes for your budget. While we’ve all read the success stories of those who have cut their budget by thousands and gone from living a life of opulence to saving 80% of their income and stuck with it for years.
Unfortunately, this type of success is not the norm for most people.
When setting up a new budget or trying to stick to an existing budget you need to allow some wiggle room. If you love getting together with friends for a coffee or beer then go do it. Or if travel is something that brings you satisfaction then, by all means, find a way to include it in your budget.
These spending categories are just as important to your long term financial success as what you cut from the budget and most importantly will ensure you stick with healthy spending habits for the long term.
10 – Celebrate the Wins
Let’s face it that sometimes sticking to a budget can be a real slog. Keeping up with the Joneses is a very real thing and the temptation to give in will come from time to time.
That is why we feel it is incredibly important to celebrate the budgeting and savings wins. If your goal is to stick to your budget for 6 months, save $5000 by the end of the year or eliminate your credit card debt, find a way to celebrate the milestone when you get there.
Give yourself an extra $100 to buy something you wouldn’t normally buy. Plan a weekend out of town. Do something to train your brain that the sacrifices you have made to get to this point were ultimately worth it in the end.
We have gotten to the point where we get immense satisfaction just by watching our net worth grow. Granted this has been helped along by a historic bull market but checking in each month and see that we are one step closer to our ultimate financial goal is a huge motivating factor to stick with it.
Final Thoughts on Sticking to a Budget
Phew. This post turned out to be a lot more epic than I had anticipated. There is just such great potential for setting a strong financial path by starting with your budget and spending mindset.
We hope that you can use a few of these ideas to help set a budget and stick with it for the long term. If you have any awesome tips for how you have kept on track with a budget we’d love to hear them in the comments below!