14 simple tips on how to stick to your budget - Boss Of My Money

14 simple tips on how to stick to your budget

Categorised as Money Management
One black young woman calculating home expenses simple budget

The easiest way to manage your personal finance is by creating an effective budget.

Once you are clear about the amount of money coming in and out, you will have better control of your money and have your spending habits in check.

To help you master your budget, keep reading to find 14 simple tips on how to stick with your budget.

When it comes to budgeting it doesn’t matter how much money you are earning or which budget method you are using, the same rules apply.

The best way to create a budget is a week or two before your next payday.

This doesn’t necessarily have to be at the end of the month. This could be weekly, bi-weekly or monthly.

Once you’ve created your weekly, biweekly, or monthly budget, you know what’s coming in, what’s going out, have your direct debits and/or standing orders all in place and know exactly what you’re going to be spending cash on; comes the hard part, actually sticking to your budget.

If you are like me (3 years ago) someone who creates a budget and never takes a second glance as soon as payday comes. It‘s time for a change. Whether you are new to budgeting or have been around the blocks, use the following tips to get you started and keep you on track.

14 Simple tips and tricks on how to stick to your budget

1. Get clear about your current financial situation

So, the saying goes that you can’t really progress successfully into your future without understanding the past and present.

I believe this, to be true. Not knowing where you are now and how you got here makes it very difficult to stick to your budget.

Use these pointers below to get clear about where you are now:

  • What is your monthly income? Do you have enough or irregular income?
  • How much money is going out in monthly expenses? Do you keep having unexpected expenses?
  • How much money do you have in savings, deposits, properties, and net worth?
  • What kind of banking and savings accounts have you opened?
  • Where is your credit score at, and how can it be improved?
  • What is the entire amount of your credit card debt or loan balance?
  • What are your spending habits like?
  • Are you impulse spending, and how is this impacting your finances?
  • Do you have and use a spending plan or track your expenses?
  • It’s fundamental, to be honest about your financial situation and identify frequent stumbling obstacles.

Mine was ’emotional and impulse spending’ when I felt stressed- Or felt like I didn’t have enough money. I would then go out and spend it all to make myself feel rich, only to regret it weeks later.

2. Establish SMARTEST financial goals

Very often, people jump straight into budgeting without clearly defining their financial goals. A great way to establish your financial goals is by taking a hard look at the next 1- 10 years of your life and list out the following three goal categories.

Category one, look at your short-term goals for the next 1-3 years.
Category two, look at your medium-term goals in the next 3-6 years.
Finally, in category 3, look at your long-term goals for the next 6-10 years.
Examples of financial goals could be savings goals, paying off student loans, reducing credit card balance etc.

Use the SMARTEST formula to detail each goal category. Make them Specific, Meaningful, Action-Orientated, Responsible, Towards, Exciting, Supported, and Timebound.

3. Remember your WHY

One other budgeting technique is to write out your primary goal: why do you want to take control of your finances? Why do you want to pay off debts? Why do you want to save?

Do you have plans to retire early, or do you have a legacy you want to leave for your family or the world?
There has to be a connection between your goals and your budget, others wise, when the going gets tough, you will throw in the towel and fall flat on your face.
This is where you create your own definition of what budgeting means to you.

4. Find a budgeting method that works well for you

Alot of people give up on the budget namely because they feel stuck with the budget method they are using. If you don’t like using apps for budgeting, change it, try excel, cash envelope system, pen and paper, 50/30/20 rule budget method or my unique pay yourself first budgeting method.
Whichever method you choose it has to be right for you, so that you can stick to your budget.
Anything complicated will not motivate you to go back to the budget you’ve created. It has to be a susceptible system and one that doesn’t cost a fortune.

5. Create a realistic budget

Occasionally we can be overzealous and over-budget to save £500 every month, while under-budgeting on our gas and electricity or mobile phone bill.

This may become annoying, and you may lose motivation to stick to your budget. Because, no matter how excited you are about saving £500, you end up returning it to your current account to pay your bills.

Set yourself realistic savings and budgeting goals and be true to yourself. The same would be true for your grocery budget. If you eat healthily, cook three meals at home and shop at an affordable supermarket but still find your food budget is high- it’s ok to just accept that’s what you spend on food.

Remember it’s baby steps. By saving £1 every week will make you £52 better off by the end of the year, rather than trying to save £20 every month and end up spending it all, leaving you will nothing.

6. Build an emergency fund

You know too well that unexpected expenses will and do happen. When they do, it has the potential to derail your budget. Murphy law makes no exception for broke people. In fact, murphy law preys on people who don’t have an emergency fund in place.

An emergency fund is 3-6 months of savings for your essential monthly expenses.

Should you get laid off from work, lost income due to illness or had to replace a big-ticket appliance like a fridge, bed or sofa; instead of charging it on a credit card and paying interest, you can save money by paying in cash and not have to worry about debt.

If you currently don’t have an emergency fund start with saving your first £1000. Then, work your way to 1 month of expenses, then 3 months and then 6 months.
By having an emergency fund, you will stay away from debt, and better able to manage your budget with ease.

7. Have fun money

On the positive side, just because you want to stick to your budget doesn’t mean you no longer have fun. Every now and then you may decide to have an occasional treat.

With this in mind, a good way to minimise impulse purchases is by having a separate pot of spending money to splurge each month.

By allocating a sum of fun money for entertainment, gifts, and eating out you never have to worry about depriving your wants and will have a set amount to spend each month.

8. Keep tabs on your grocery budget

The food budget is one of the most challenging categories in a budget to stick to. That being said, you need to establish a plan to overcome this.

Every household is different, therefore, reviewing your past behaviour and looking for clues on when you are most likely to go over your grocery shopping will help. It could be on the days when you finish work late or when you don’t meal prep? Is it when you delay weekly grocery shopping?

Could it be when you are around a certain group of people, and you don’t know how to say NO, to another expensive lunch or work do? Or it may even be, not knowing how to say NO to the kids? You can overcome this by leaving them at home when you go to the grocery store.

Whatever it is, don’t ignore it, pay attention to it, and see that you have a strategy in place to stay within your food budget.

Some simple and quick wins for a grocery budget are to start by using up what you have at home before heading out to the store, and by using cash envelopes and meal planning you could save tons on your food shopping, using that extra money towards your fun money, debts or savings.
For more creative ideas you can find 50 ways to save money on grocery shopping here.

9. Having a positive mindset and an environment for success is everything

In the long run, how you feel and think about money is what you will become. It really is that simple.
It’s important to, fill your mind with positivity.

Read books about managing personal finances, talk to people who are managing their finances well and ask for tips. In this day and age, access to information is not our problem- it’s implementing what we learn.

Listen to podcasts about managing finances, watch YouTube videos, listen to audiobooks every day about managing personal finances, follow finance handles on social media (Follow Boss Of My Money on Instagram) and at a minimum take 3 things from what you have learned and implement immediately.

If becoming debt-free, having savings, living below your means but within your needs, and securing your future is essential to you, having cheerleaders and people that will call you out and discourage you from spending is what will make you win in this race.

Stay away from spendaholic friends. Don’t engage in conversations about spending, holidays, and shopping if they are things you are struggling with.

10. Review your monthly budget regularly

Reviewing your budget regularly will help you stay on track, identify pitfalls and catch overspending quicker.

Have a budget plan in place for how you will go back and review your budget. Will you do this every day, twice a week, or once a week?

Have you set a reminder on your phone or calendar as to when this will be?

Have you checked in with your partner and agreed on a mutually convenient time to review your budget together?

If you manage the finances, decide on how regularly you will update the other spouse. Periodically reviewing your budget is the best way to create a realistic budget that you can actually stick to.

11. Automating your finances will help you stick to your budget

Now, I say this with caution. I don’t believe automating alone will work.

A lot of people automate (set up standing orders and direct debits) without budgeting, which can become a disaster because as much as you are paying your bills and credit card bills, you could be wasting money in other areas.

Just because you pay a bill doesn’t mean you haven’t wasted money.

Budgeting is the strategy, and automation is the tool.

Automation takes the thinking out of the equation.

So, after you’ve created your budget and made key decisions (budgeted) relating to your financial goals now review your banking strategy (automate) and ensure your direct debits, standing orders, and money are in the correct accounts.

12. Start using cash envelopes

The Envelope System is an excellent way of learning how to stop using credit cards and debit cards, for the most part. It’s also a brilliant way for people who want to physically see what they spend on and prefer using cash.

There are different extremes to Cash Envelope System Budgeting. Some people only use the cash and envelope system to pay all of their bills, others will use direct debit, standing order, and debit cards to pay for specific items like rent, mortgage, council tax, utility, phone bills, etc., and use cash and for food shopping, clothing, car servicing, fun, children miscellaneous, etc. Whichever method you choose, the key is that you make it easy and it works for you.

There are three fundamental principles to Envelope System Budgeting:

1. The first principle of an Envelope System is assigning a job to every penny.
2. The second principle is that you assign an envelope to every bill but you can choose to pay by cash- especially for small expenses (fill those envelopes with money), and for the larger expenses you would pay via direct debit, standing order or using your bank card.
3. The third is that you must keep the envelopes in a safe and secure place, preferably safe fire storage.

13. Get an accountability partner to help you stick to your budget

Imagine having to justify every purchase you make outside of your budget to a trusted friend or family member who will give it to you like a true copper!

Well, as annoying as that sounds, that might be just what you need to stick to your budget.

If you are tempted to make a purchase that is outside of your budget, talking it out with a trusted individual who understands your goals, can save your money and regrets. Ideally, you want to get to a place where you become accountable to yourself, but until then call a friend!

14. Be flexible with your budget

When it comes to finances, the economy, and financial institutions there are a lot of things out of your control. It’s easy to get frustrated with the things that are out of your control, like job loss, divorce, inflation, interest rates, property crashes, and things breaking.

Therefore, you must focus your energy on the things that are in your control, such as your budget, what you spend money on, how much you are saving, and how much debt you incur.

You may need to be flexible for some months, as you deal with life changes and variable expenses. It’s ok for you to take a break from saving or investing to deal with hard times. Give yourself grace and be sure to get back on track after resolving the issue at hand.

Recap: 14 tips to help you stick to your monthly budget

  • Get clear about your current financial situation
  • Establish SMARTEST financial goal
  • Remember your WHY
  • Find a budgeting method that works well for you
  • Create a realistic budget
  • Build an emergency fund
  • Have fun money
  • Keep tabs on your grocery budget
  • Having a positive mindset and an environment for success is everything
  • Review your budget regularly
  • Automating your finances will help you stick to your budget
  • Start using cash envelopes
  • Get an accountability partner to help you stick to your budget
  • Be flexible with your budget

It’s a wrap

In conclusion, I believe that budgeting is key to your financial success.

It’s the gateway to your financial future.

Besides, as dull as you might think budgeting is, it’s just one of those things we do because of the benefits and not necessarily because it’s fun, but because it’s smart.

In saying that, if you add a glass of wine, with a bowl of popcorn to the mix, you will experience budgeting on a whole new level. I’m giving away my secret here!