How to stick to a budget—a simple guide

Sticking to a budget might seem daunting, but it can be done—if you adopt a budget-minded attitude. Here’s how to make the change.

A simple fact rules everyone’s financial life: You only have so many dollars in your bank account to pay for your expenses, from house payments to haircuts and everything in between. So how do you help ensure you have enough money to cover all your needs and some of your wants? That’s where a budget comes in. Allotting a certain amount for every spending category in your life and dictating where your money goes—and, just as importantly, doesn’t go—can help you spend smartly, save more, and avoid debt.

Of course, making a budget takes time. But the real trick is in following your budget. Learning how to stick to a budget takes practice. Enter this handy guide, in which we break down everything you need to know about how to stay on budget, with expert advice from budgeting specialists.

Why is a budget important?

What are the best arguments for learning how to budget better? For starters, being fiscally responsible means you don’t come up short when bills come due. Being able to pay your bills on time is a money-saver. For example, it can mean eliminating late fees or added interest because you fall behind on a payment. 

Budgeting also makes it far more likely that you’ll meet your long-term financial goals, says Tawnya Schultz, founder of The Money Life Coach website. Planning how to spend your money makes it harder to spend too much in certain categories—say, restaurant meals or clothing—so you’ll have enough left over for goals like taking a vacation or buying a car.

A budget not only helps guide your spending; it can also help you build an emergency savings fund. Financial pros recommend having at least three months’ worth of expenses saved in case of an emergency like an unexpected medical bill or a job loss. A Discover® Online Savings account is a great way to get started, as it offers competitive interest—compounded daily—with no minimum deposit or monthly fees.   

Create a budget you can stick to 

Sticking to a budget means setting realistic goals. For example, while saving 50% of your monthly paycheck might look good on paper, that’s probably not feasible—particularly if you have pesky needs like food, shelter, and, yes, even entertainment. Instead, it makes more sense to look closely at where your money is going now and find areas where you can spend less. 

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“Having a budget should make you feel in control, like you’re doing something good for yourself,” Schultz says. “It can even be fun if you turn it into a game.” 

For instance, whenever you come in under your target expense number, treat yourself to something you’ve wanted to buy, like new shoes or concert tickets. Whatever your budget strategy, combine realistic expectations with a sense of fun.

Yet even the most realistic budgets need to be flexible, says Carrie Friedberg, a financial coach and Certified Financial Behavior Specialist at SF Money Coach. “You need to do the math: income minus expenses plus bills. Is the result a positive number, or are you on a trajectory to over-withdraw or rely on credit cards? If you are facing a shortfall, something is going to have to give. You need to adjust your spending plan by increasing income, reducing expenses, sourcing creative solutions to your needs, or negotiating,” she says.

In other words, a budget doesn’t exist in a vacuum. It should reflect what really matters to you so you have a better chance of sticking to your goals. Planning to spend and save wisely can go a long way toward setting you up for long-term financial success.

How to stick to your budget 

Now for the real work of learning how to make a budget and stick to it. Reframe your thinking: staying on budget is a positive—a chance to be solvent, have integrity, and improve your spending rather than restrict it, Friedberg says. “You’re aiming to ‘remain connected to your money’ and ‘give your money purpose,’” Friedberg says. Here are nine tips to help you do just that.

Assign your money on arrival

Schultz’s tip: Divvy up your paycheck—or any other money you receive—as soon as it lands in your account. The idea is to consider which expenses you need that income to cover before you get paid again. Looking ahead can help you stick to that plan. “If you’re set up a month in advance, you should already know which check is covering which expense,” Schultz says (assuming your paydays are semimonthly or biweekly). 

“For example, if your gas budget is $500 each month, you know you can use $250 in the beginning, with the first paycheck, and $250 in the second half of the month, with your second paycheck.” Your money shouldn’t sit in your account without a plan—that makes it too easy to spend in unplanned ways.

“Making progress with your budget can give you a sense of control and peace around your finances that you might never have had.”

Tawnya Schultz, founder of The Money Life Coach

Budget to zero

Alicia Durham, director of personal finances at DACY Financial Coaching, says many people misunderstand the valuable advice to “budget to zero.” She says that zero-sum budgeting doesn’t mean you should spend all your money and live paycheck to paycheck. Instead, it’s “assigning every dollar to a job,” she explains. “Some dollars are assigned to save. Some stay in your checking account as a buffer. Some are meant for short-term needs, like buying groceries, while others are for big-picture expenses, like home improvements. It’s not about spending every dollar but allocating every dollar and being intentional with your money.”

Use auto draft for bills

One smart way to ensure your bills are always paid is to transfer the responsibility to your bank. Setting up auto transfers or auto bill pay from your bank account helps ensure you pay bills on time, Durham says. Separating your day-to-day spending from your bill payments and also automatically putting money into savings will help you keep these categories distinct. 

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Plan out meals in advance

Where does a whole lot of our money end up going? Look no further than your fridge—or your favorite neighborhood restaurant. Everyone needs to eat, and it’s easy to overspend on food without a plan. “How often do we go to a grocery store without a list and feel anxious or struggle to manage our spending?” Schultz says. 

Luckily, there are many good meal planning tools you can find online for free, some of which allow you make a list of your upcoming meals and plan your shopping accordingly. And when it comes to eating out, it’s important to keep your budget top of mind. Schultz says, “Ideally, you want to spend no more than 5% to 15% of your take-home pay on food, including eating out and groceries.”

Break up your monthly budget into pay cycles

Durham suggests creating the usual monthly budget—but then parceling out day-to-day expenses across the weeks within that month. “It helps you pace your spending a bit,” she says. “It’s especially helpful for people who are paid once a month, so you can avoid spending all of it right away.” 

When possible, don’t pay all your bills at once. If you find too many of your bills are due simultaneously, try planning to pay some bills early or call a few of your creditors and see if you can change your regular due date. “Have a few due dates at the beginning of the month and a few at the halfway point,” Durham says. “You don’t want a feast-or-famine cycle throughout the month.” If you can’t get your due dates moved, try to prepare. Make sure you have enough money saved to cover any mandatory expenses between paychecks, she suggests.

Keep your social calendar in check

You don’t need to stay locked indoors just to make your budget work. The key is to plan for fun and to socialize within your budget. Durham says a budget should “give you the freedom to spend,” adding that social people should set aside money specifically for going out. Have a plan for social events rather than impulsively spending money earmarked for something else. Allocate money within your budget to spend with those you love, and stick to what you can realistically afford on those outings. 

Also, take care to avoid what Durham calls “reactive spending.” Say you have enough money budgeted to order takeout once a week. If you’ve already ordered takeout that week but don’t feel like cooking, pop a frozen pizza in the oven rather than break your budget by ordering in again. The same principle applies to impromptu social gatherings, which can cut into your budget fast.  

Learn to say “no”—or “not yet”

Durham has excellent advice for when you’re struggling not to splurge on that oh-so-alluring new outfit/gadget/weekend getaway: “I like to think of it not as a ‘no’ but as a ‘yes’ toward your greater goals,” Durham says. If you’re saving for that long-awaited trip to Paris but that hot new concert ticket looks mighty enticing, try to reframe your thinking: It’s not that you don’t get to go to the show; it’s that you do get to go to the City of Lights. Voilà! You’ve just turned a negative into a positive—and kept your budget intact.

Meanwhile, if you don’t have room in this month’s budget for that concert ticket, but you might next time the artist comes to your city, don’t focus on the “no” but on what is and what you do get to do. “Pausing is a very powerful financial tool,” Friedberg says. 

Evaluate your credit card habits 

“It’s easy to get into a credit card debt spiral,” Schultz explains. “It’s about knowing yourself and your habits.” Schultz recommends taking a good look at how you are using—and paying off—your credit card debt. Ideally, you should pay off your credit card balances in full each month to avoid paying interest, but that’s not always easy or possible.

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While using a credit card can be a pathway to earning travel points or other perks, chasing those benefits can also rack up debt if you’re not spending carefully. If you determine that credit card debt is a problem for you, make the cards harder to access “so it’s less easy to pull them out if you see something you want,” Schultz says. 

You should also figure out what’s causing you to use a credit card and if there are ways to avoid relying on credit. For example, can you reduce your expenses and add more money to your savings or checking account to pay for purchases? Then you can plan to pay for the bulk of your expenses in cash or with your debit card—a good way to stick to your budget. 

Be accountable

How do you ensure that you stick to your budget, even when it’s hard or the temptation to splurge is difficult to ignore? By building in accountability measures, Durham says. “I like to say budgets require the 3 ‘P’s: practice, persistence, and people.” For the first two, continuing to update and follow your budget makes it easier to continue budgeting. “If you want to do anything in life but don’t have a plan, you’re likely not going to get there,” Schultz says. “Just like doing a push-up once won’t get you the results you want, creating a budget once won’t, either.” 

The third “P” involves leaning on people in your life who will support your budgetary habits. “You can look to your friends, to social media—there are tons of groups that can keep you thinking about your goals—or to financial coaches to set up manageable systems for you,” Durham says. “The key is to find people who lift you up.”

If going over your budget becomes a pattern, change your budget. Think about ways to increase your income or decrease your expenses. Also, track your spending by reading through your credit card and bank account statements. This exercise can help you spot instances where you’re not following your budget or catch increases in your expenses. 

No matter how you start a budget—and stick to it—remember the most important part: It’s meant to make your life easier, not harder. 

“Making progress with your budget can give you a sense of control and peace around your finances that you might never have had,” Schultz says. “It enables you to enjoy your life more. Before I had a budget, I was constantly swirling about whether I could spend money, and using up that mental energy can drain you. Now, I never have to think about it.”

If you’re ready to commit to budgeting habits that work for you, now’s the time to consider a Discover Cashback Debit account and Discover Online Savings Account to keep track of your spending and encourage good savings habits.  

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