How To Stick to a Budget

It’s one thing to set up a monthly or weekly budget, but sticking with it day to day over the long haul is a whole different story. Even the best-laid plans can go out the window if you encounter unexpected expenses, experience an income dip, or fall into impulsive spending habits. Learning how to stick to a budget long-term can help you control your spending, save for future goals, and reduce debt. Once you understand what makes it hard for you to stick to a budget and implement strategies to overcome those challenges, you’ll be better equipped to consistently manage your finances and pave the way for long-term success and peace of mind.

In this article, we’ll cover:

• The challenges of sticking to a budget

• Creating a realistic budget

• Automating savings and bills

• Planning for irregular and unexpected expenses

• Cutting out impulse purchases

• Adjusting your budget

• Staying motivated

Why sticking to a budget is challenging

When you sit down and make a budget, you’re envisioning a specific future scenario involving how much money you’ll make and how you’ll want and need to spend it. But reality doesn’t always match up with the ideal situation you had in mind while planning.  

Common reasons people struggle with sticking to a budget include practical challenges like unexpected expenses and financial struggles caused by a high cost of living compared to your income. Psychological factors also come into play, which can drive a temptation to overspend or avoid dealing with financial issues. These challenges can create a cycle of financial strain, making it difficult to maintain control over one’s spending habits. 

Financial difficulties and budgeting struggles

The high cost of living, coupled with the reality of many individuals living paycheck to paycheck, significantly impacts the ability to stick to a budget. In areas where essential expenses such as housing, food, and transportation consume a large portion of one's income, there may be little room left for discretionary spending or savings. This often leads to a situation where unexpected expenses—such as medical emergencies or car repairs—can derail even the most carefully planned budgets. 

Moreover, financial difficulties can create a sense of urgency that prioritizes immediate needs over long-term financial goals, making it challenging to focus on sticking to a budget. Understanding these realities is essential, as acknowledging external factors beyond your control can help you take a flexible and realistic approach to financial planning, fostering resilience in the face of economic challenges.

Emotional challenges in budgeting

Managing your money isn’t all about logic and reason; the way we spend is inherently affected by our emotional states as well. Hurdles such as stress, frustration, and the fear of missing out (FOMO) can significantly undermine your ability to stick to your planned spending limits. These feelings can lead people to make impulsive purchases that aren’t aligned with their big-picture financial goals, but provide a sense of emotional support and comfort in the moment. Other psychological barriers can further complicate the budgeting process. Feelings of guilt associated with spending can lead to a negative mindset about finances, causing people to avoid tracking their expenses altogether. Similarly, anxiety over financial management can create a sense of overwhelm, making it harder to stick to a budget. 

If you struggle to stick to a budget, you’re not alone. It’s completely normal to experience emotional challenges when managing your money. By recognizing and addressing these emotional and psychological challenges, however, you can give yourself compassion and start to build a sustainable and effective budgeting strategy that empowers you to take control of your finances.

Create a realistic budget

Creating a realistic budget is crucial for effective financial management, as it provides a clear framework for tracking income and expenses. A realistic budget means setting attainable financial goals based on your actual income and necessary expenditures, rather than idealized or overly optimistic figures. It involves assessing all sources of income, accounting for fixed and variable expenses, and making choices about discretionary spending that you can actually live with. 

To develop a realistic budget, you should also consider potential unexpected expenses and savings goals, ensuring that your budget remains flexible enough to adapt to changing circumstances. Regularly reviewing and adjusting your budget helps you stay on track and make informed financial decisions, ultimately leading to better control over your finances and a greater ability to achieve long-term objectives.

Assess your financial situation

Begin by thoroughly evaluating your current financial situation. Start with your income: document all sources, including your salary, plus any earnings from things like side hustles, government programs, child or spousal support, and any passive income streams. Next, examine your expenses, both fixed costs that stay the same each month (such as rent or mortgage, insurance, and debt payments) and variable expenses that fluctuate (like groceries, entertainment, and utility bills).

It’s essential to understand your cash flow. Compare your planned expenses to your income to ensure you’ve allocated enough money to cover your expected spending. Then track how much money is coming in versus how much is actually going out on a monthly basis. This will help you identify trends and areas where you may need to adjust your spending.

Understand needs vs. wants

One of the most common reasons people struggle with budgeting is that they wind up spending more on discretionary expenses than they’d planned. That’s why it’s valuable to get a clear sense of your needs vs. wants and formulate plans that make sense for your personal circumstances. 

Needs are the expenses that are truly necessary for basic living, like food, shelter, and transportation. Wants are the nice-to-haves that add comfort, convenience, and fun, but aren’t strictly required to get by. Needs and wants are very personal, and it’s hard to stick to a budget if you’re not aware of what’s truly required vs. optional for you. For example, some people decide getting take-out once a week is a “want” they could do without and don’t budget money for it, but then wind up stopping by the drive-through when they’ve had to work late and don’t have time to cook. That’s an instance in which it may be more realistic to categorize periodic meals out as a need. On the other hand, it’s easy to hold onto certain expenses as if they’re needs when you could actually be perfectly happy without them, such as subscribing to multiple streaming services even though you rarely use some of them. In that case, you might be able to reduce that discretionary spending without feeling pinched, enabling you to better stick to your budget for savings goals.    

Choose a budgeting method

When planning how to stick to a budget, consider whether a specific budgeting strategy could help remove some of the guesswork and result in an approach that makes intuitive sense for you. There are lots of options, so you can find one that suits your lifestyle and financial situation. Here are some popular options:

• Envelope system: Create a physical envelope for each of your specific budget categories, fill it with the cash you’ve allocated for that category, and spend only what's in each envelope for the month. This method helps you stick to your budget because when an envelope is empty, you stop spending in that category for the month. By physically separating your cash, you have a clear visual reminder of how much you have left to spend and can more easily stay within your financial limits.

• 50/30/20 rule: Allocate 50% of your income for needs, 30% for wants, and 20% for savings and debt repayment. This budgeting method provides a useful guideline for allocating your income to ensure your essential expenses are covered, while also allowing for some discretionary spending and savings. By following this structure, you can create a balanced financial plan that supports both your immediate needs and long-term financial goals.

• 70/20/10 budget: Allocate 70% of your income to essential expenses, 20% to savings or debt repayment, and 10% for discretionary spending. This approach takes the same concept as the 50/30/20 rule, but uses different percentages for each broad category. If you’re wondering how to stick to a budget in the face of rising costs of living or wage stagnation, this strategy may be useful, since it devotes a higher portion of your income to essentials. 

• Zero-based budget: Assign every dollar a job, ensuring that your income minus expenses equals zero. This means allocating every dollar you earn to specific expenses, savings, or investments, so you're intentional about your financial decisions. This strategy gives you high visibility and precise control, and it requires you to pay close attention to your spending. That level of oversight can help you stick to a budget. 

• Pay yourself first: Prioritize savings by setting aside a portion of your income before budgeting for other expenses. This ensures that you are consistently building your financial security and preparing for unexpected costs. By treating savings as a non-negotiable expense, you can cultivate a healthier financial habit that supports your long-term goals. If building your savings is a strong motivation for learning how to stick to a budget, this strategy can help you put your priorities into practice. 

Set achievable goals

Establishing realistic and attainable financial goals is crucial for effective money management. These goals serve as a roadmap to guide your financial decisions and help you track your progress over time. You might want to come up with specific savings goals, as well as goals focused on behaviors and money management habits. By setting both types of goals, you can maintain motivation and have a clearer vision of what you can achieve by sticking to your budget. Regularly reviewing and adjusting your goals as your financial situation changes can also help you stay on track and achieve the financial stability you desire.

Savings goals

Savings goals are things you want to have money for in the future, and need to save up over time to attain them. Creating specific savings goals allows you to make a concrete plan to work toward your ambitions over time, and knowing exactly why you’re saving the money can help you stick to your budget when you’re tempted to spend money. Goals can be short-term, mid-term, or long-term. 

Common short-term and mid-term savings goals:

• Building an emergency fund 

• Paying off credit card debt

• Saving for a down payment on a house

• Planning a vacation or wedding

Common long-term savings goals:

• Building a solid nest egg

• Saving enough money to retire

• Saving for a child's education or future needs 

• Paying off your mortgage

One way to work toward savings goals is by deciding to save a specific amount each month. This could be a fixed percentage of your income or a set dollar amount based on how much money you need for your goal and how much time you have to reach it. 

Money management goals

As you work out how to stick to a budget, you’ll begin to recognize that putting your plans into action comes down to developing the behaviors and habits that support financial health. That’s why setting goals around money-management behavior can be helpful. This involves identifying the actions that will help you feel more confident with your money, better understand your financial landscape, and develop a sense of control. The money management goals that make a difference for you depend on your preferences and interests; common examples include:

• Reducing discretionary spending on a certain type of expense each month

• Listening to a podcast or reading a publication about financial planning each week

• Checking your spending and updating your budget twice a week 

• Creating a big-picture financial plan and revising it quarterly 

• Setting up a budget app and checking it before you spend money

Automate savings and bills

It’s easier to stick to a budget when you don’t have to do all the heavy lifting yourself. Automating your savings and bill payments can help reduce the temptation to spend money elsewhere and ensures that your essential financial commitments are met on time. 

How to set up automation

• Savings automation: Use your bank’s online tools to schedule automatic transfers into your savings and/or investment accounts every payday. If you get paid via direct deposit, you could also have your employer automatically put a portion of your paycheck directly into your savings account.

• Bill payment automation: Set up automatic bill payments to ensure you never miss a due date and avoid incurring late fees. By linking your bank account or debit card to your service providers, you can automate payments for recurring bills like utilities, rent, and debt payments. This not only saves you time, but ensures you don’t wind up with late charges that can ding your credit score.

• Monitoring automation: A “set it and forget it” approach makes it easier to stick to your budget for savings and bills, but you’ll still want to keep an eye on things. Make a note on your calendar for the date each automatic savings transfer or bill payment is scheduled, and check your bank account to ensure you have sufficient funds in your account. This practice helps you avoid overdrafts, which can result in fees and negatively impact your credit score. Additionally, by keeping an eye on these transactions, you can prevent missed payments that could lead to service interruptions or late fees.

Plan for irregular and unexpected expenses

Recurring expenses are the regular, predictable costs that occur at set intervals, such as weekly or monthly. Examples include rent or mortgage payments, insurance premiums, and monthly subscription services or gym memberships. Variable expenses you can rely on every month are also part of your recurring expenses, like groceries, utility bills, and entertainment. When you make your budget, be sure you’ve accounted for all these regular recurring expenses. 

But life doesn’t stay the same from month to month, so you’ll also need to consider irregular and unexpected expenses. If you don’t plan ahead for this type of expense, it can be hard to stick to a budget; surprise costs can throw off your financial balance and leave you scrambling to adjust your financial plan. By anticipating non-monthly expenses and creating a financial safety net for unexpected expenses, you’ll be better able to stick to a budget each month. 

Budget for non-monthly expenses

To incorporate money for less frequent expenses like biannual insurance premiums, quarterly oil changes, holiday gifts, and vacations into your monthly budget, set up a sinking fund. Start by estimating the total amount you’ll need for these expenses over the year. Divide that total by 12 to determine how much you should save each month. Create a separate savings account specifically for this purpose. Each month, transfer the calculated amount into this account. This way, when these expenses arise, you’ll have the funds readily available without impacting your regular budget.

Build an emergency fund

An emergency fund is a financial safety net designed to cover large, unexpected expenses, such as big medical bills, major car repairs, or urgent home repairs. These costs can often be stressful and financially burdensome if not planned for in advance. An emergency fund also serves as a source of funds to cover your necessities in case you suddenly lose your job.

To get started, determine how much you should have saved for emergencies. Experts recommend saving enough for three to six months’ worth of living expenses so you can afford a big emergency or take care of your needs if you lose your income. Next, create a budget that allows you to set aside a percentage of your income each month, even if it’s just a modest amount. Over time, these contributions will accumulate, providing you with a solid financial cushion to help you navigate unexpected situations without derailing your overall financial stability. 

Build a rainy day fund

A rainy day fund is a separate savings account designated for smaller, non-emergency expenses that arise unexpectedly but can be expected to come up now and then, such as small car maintenance needs, an extra day of childcare, or home repairs that aren't urgent. Unlike an emergency fund, which is typically reserved for critical, unforeseen events like job loss or significant medical emergencies, a rainy day fund covers difficult-to-predict expenditures that would otherwise make it harder to stick to your budget in one month. Determine an appropriate target amount that suits your lifestyle and typical expenses; $500 to $1,000 is a common amount to keep in a rainy day fund. Contribute a small, consistent amount to the fund each month until you hit your target. This proactive approach not only prepares you for these minor financial setbacks but also helps prevent you from dipping into your emergency fund, ensuring it remains intact for more serious situations.

Avoid impulse purchases

Impulse buying is the act of making unplanned discretionary purchases, often triggered by emotions or attractions to products. These spontaneous decisions can lead to overspending and disrupt your budget, as they are typically based on immediate gratification rather than thoughtful consideration. Here’s how to avoid them:

Identify personal triggers

To effectively manage impulse buying, it's important to recognize the triggers that drive impulsive spending for you. These triggers can vary widely among individuals and often fall into a few common categories. By identifying and understanding these triggers, you can develop strategies to resist impulse buying and make more conscious spending decisions.

• Emotional spending: Many people shop to cope with emotions such as stress, sadness, or boredom. If you find yourself reaching for your wallet during difficult times or after a long day, you might want to make a list of alternative activities that provide a similar sense of relief and consult it when you feel the urge to make an emotionally driven purchase. If you have a friend who shares your goal to reduce emotional spending, you could make an agreement to text each other for support in difficult moments.

• Shopping as entertainment: For some, shopping serves as a form of entertainment or a way to pass the time. If you often find yourself browsing stores or online shops out of boredom, come up with alternative places to spend your time. For instance, drive to the library instead of the bookstore, visit a museum instead of the mall, and bookmark websites with interesting reading or videos to visit in place of tempting online shops. 

• Response to sales and promotions: Sales can create a sense of urgency that prompts impulse buying, often for things you wouldn’t have purchased otherwise. If you notice that discounts or promotions trigger your shopping instincts, consider unsubscribing from marketing emails and unfollowing brands’ social media channels so you’re not bombarded with buy-it-now messages.  

Strategies to combat impulse buying

• Waiting period: Implement a 24-hour or 30-day waiting period before making non-essential purchases. At the end of the waiting period, you might find that the item is no longer so appealing. And if you do still want it, you can plan for it in your budget. 

• Impulse spending budget: It’s not always realistic to completely stop buying things on a whim. So instead of letting it stop you from sticking to a budget, make it an intentional part of your budget. Designate a small amount each month for “fun spending money” so you have the freedom to indulge, but a specific spending limit so you don’t derail your budget.   

• Mindful shopping: Impulse buys often sneak in when people are shopping for things already in their budget. It’s easy to go off your list when you’re at the store and see something appealing or catch sight of a sale. Get into the right frame of mind before you go shopping; make sure you’re not tired, hungry, or stressed so that you have the fortitude to stick to your list.  

• Accountability: To keep yourself accountable, consider asking a friend or family member to be your accountability partner: someone you can call or text for encouragement when you’re struggling to resist a shopping urge. A budgeting app can also provide accountability by sending alerts when you’re getting close to your spending limits or going off track with your budget.   

Adjust your budget over time

It's important to regularly review and update your budget to align with your current financial situation. This includes tracking any changes in your income, such as a salary increase or loss, as well as adjustments in your expenses, like bills or groceries. Additionally, consider life circumstances that may affect your finances, such as moving, starting a family, or unexpected expenses. By staying proactive with your budget, you can maintain better control over your finances and make informed decisions.

When and how to adjust your budget

• Set aside time each month or quarter to review your budget. These regular check-ins help you assess your progress, identify any areas that need adjustments, and ensure you stay on track with your financial goals. By analyzing your spending and income patterns, you can make informed decisions to improve your financial health.

• Reassess your budget whenever you experience major life changes, such as getting married, starting a new job, or welcoming a child. These events can significantly impact your financial situation and priorities. Additionally, if your financial goals evolve—like saving for a home or planning for retirement—it's crucial to adjust your budget accordingly to ensure you stay on track and meet your new objectives. 

• Remaining flexible allows you to adjust your plans and finances when unexpected expenses arise or priorities shift. This adaptability helps you navigate challenges without feeling overwhelmed, ensuring that you can respond effectively to new situations while still working toward your goals. Don’t be afraid to revise your budget if your financial reality consistently deviates from your plans; if you want to learn how to stick to a budget, that budget needs to be a realistic reflection of your needs and lifestyle.

Stay accountable and motivated

Staying motivated is crucial for long-term success. It helps you push through challenges and maintain focus on your goals. Consistent motivation fuels determination, enabling you to overcome obstacles and stay committed to your journey.

The role of accountability partners

Having a budget accountability partner—whether it's a spouse, friend, or financial advisor—offers valuable support and motivation. This person can help you stay focused on your financial goals by providing encouragement during tough times, sharing insights, and holding you accountable for your spending habits. Their presence can make the budgeting process less daunting, turning it into a collaborative effort that enhances your chances of success. Loud budgeting can be an extension of this idea. When practicing loud budgeting, you speak openly about your financial goals and strategies with friends, family, and your online community to bolster accountability and a sense of community. 

Use accountability tools

Leverage budgeting tools and apps such as EveryDollar, YNAB (You Need a Budget), or PocketGuard to effectively manage your finances. These platforms allow you to monitor your spending in real time, track your financial progress toward goals, and set up reminders to help you stay within your budget. By using these tools, you can gain better insight into your spending habits and create an accountability system that’s always in your pocket.

Celebrate small wins

Celebrating small financial milestones helps you stick to a budget by providing consistent positive reinforcement. When you achieve a goal like paying off a credit card, hitting a savings target, or maintaining your commitment to tracking your spending for a month, give yourself a reward. Acknowledging these accomplishments reinforces positive behavior and encourages you to continue making smart financial decisions. Just be sure you reward yourself in ways that don’t undercut your financial plans; look for free or low-cost treats or experiences that make you feel rewarded without spending a lot of money. 

Learn how to stick to a budget for long-term financial health

Sticking to a budget involves creating a realistic plan, automating your finances, planning for expenses, avoiding impulse purchases, and staying accountable. Implementing these strategies can help you take control of your financial future. Remember, budgeting is a skill that improves with practice and consistency. The long-term benefits, such as financial stability and reduced stress, are well worth the effort.

Be patient and persistent as you work toward your financial goals. Setbacks are normal, but if you think of this as an ongoing process, you can approach money management with self-compassion and turn stumbles into learning opportunities. Start your budgeting journey today and experience the peace of mind that comes with greater financial stability.