13 Tips for Staying on Budget

Money

My personal budget is set up so I have a certain amount of money set aside for bills and the rest is for what I call “household spending”.  Household spending includes groceries, gasoline, makeup, eating out, entertainment, doctor visits, etc.  I don’t have any trouble sticking to the bills budget but the household budget is another matter entirely.  If you struggle with sticking to your household budget, like I do, here are some strategies that might help:

1.       If you don’t have money to spend, it’s probably not a good idea to go shopping.

2.       Keep track of how much you’ve spent and how much you have left.  If you don’t know how much money you have left, you won’t know if you can spend any.  I know, I know – ignorance is bliss, but if you’re trying to stay on budget, you have to keep track!

3.       When you’re out shopping, have a list.  And on that list, have estimates of how much you’re going to spend on each item.  Add it up and be sure it fits the amount you have available.  If it doesn’t, modify your list.  And while you’re shopping, as you mark things off your list and put them in your cart, it might be a good idea to write down how much the item actually costs.  That way, if you have to put something back, it’ll be easier to figure out which item needs to go back.

4.       Shop with cash and leave your cards at home or in your car.  It’s hard for me to spend cash but easy for me to spend the invisible money in my checking account.  And unfortunately, if I go in with cash but spend more than my cash, I’ll just whip out my card and figure it all out later.  So if that’s what it takes, take only cash.  When it comes to cash, you can’t spend it if you don’t have it.

5.       Be realistic.  If you KNOW you’re going to go out to eat on Friday, budget for it.  If you’re not realistic, you’re probably not going to be able to stay on budget.

6.       Don’t buy anything that’s not on your list.  I stay out of a lot of trouble when I do this!  Obviously there are exceptions.  If you’re out shopping and suddenly remember you needed something that isn’t on your list, adjust if you need to and get the item.  This principle of not buying anything that’s not on your list applies primarily to impulse items.

7.       If you mess up, don’t give up.  Analyze what went wrong and do a course correction.

8.       Be accountable to someone about your spending.  You don’t have to give them every detail but perhaps a weekly update on how you’re doing – whether you’re sticking to your plan or not.

9.       Make a game out of it.  See how well you can do and then put the money you don’t spend in a jar for a specific savings goal.

10.     If you have a category you’re really struggling with, you might need to analyze that category, figure out what’s going on and come up with a plan to fix it.

11.     At the end of any shopping trip, but before you check out, take one last look at your cart or basket and see if there’s anything you can put back.

12.     Keep a chart on the refrigerator or some other prominent place showing everything you buy!  Knowing you have to write it down and others might see it could be a motivation.

13.     At the end of each week, analyze your spending.  See how close you were in each category.  Note what you did well and what you messed up.  Note what you could have done different to make it work better.

These strategies help me stay on budget.  What are your strategies?

Comments

  1. I have a new budget to stick to–my husband recently took a job in our dream location, but his new job pays less than half of his old salary. I’m extremely happy to be where we are and definitely glad we made the move, but the budget is tight.

    I’m getting hung up with how best to track my spending. I tried using my Filofax expense pages to write down every time I spend, but flipping pages and writing it down at the register while juggling my debit card (and two kids) was too much. Then I tried keeping my receipts in my wallet to record later but as you might guess it never happens. I’m considering just using a pocket notebook to record expenditures. How do you keep track of what you spend? Thanks for any details!!

    • Sometimes I use cash but I don’t love doing that. The good thing about cash, though, is that you get your cash, divide it into envelopes, and then tracking your spending is easy.

      My husband is self-employed so I have us set up to receive a weekly paycheck. A set amount is transferred from the business account to the bills account. Then a set amount is transferred from the bills account to the household account. I have a certain amount to spend each week. I use a planner page I made that is divided by week. At the beginning of the month I write down all my known expenses, what I want to spend at the grocery store and for gasoline. Then what’s left is my “miscellaneous money”. I’ve been getting cash and dividing into appropriate envelopes based on that sheet but I don’t like using cash so I’m not going to do it that way any more. I’m going to use a spreadsheet in my planner with the different categories and show deposits and withdrawals – kind of like a checkbook register with a bunch of balances. That way I can see at a glance how much is left. However, the miscellaneous money and eating out will be cash only. Those are the areas where I tend to overspend so getting cash for those areas will help me stay on budget. I’ll e-mail you some samples this evening.

      We’ve tried the methods where you divide up your money in a bunch of different envelopes but we found that to be too cumbersome. We keep it simple by dividing the household account into a weekly amount. As long as I stay within that amount, I’m good!

      • I like your system! I too don’t like to use cash. It seems to go really fast and then I don’t know where it went. When I use my debit card, at least I can look up on my bank statement where I spent! I’m still trying to come up with a system that will work for me. We have a lot of large annual expenses (filling the heating oil tank, property tax (here called council tax), car insurance (which is outrageously expensive here for some reason) etc. that I need to set money aside for each month so that when the annual payment is due we have the money to cover it. Right now at the beginning it’s hard to know what our variable expenses will be, but after a couple of months I’m sure I’ll have a handle on it!

        • Those large occasional expenses are killers and definitely require advance planning.

          We’re self-employed and have been for 25 years so if the large occasional expenses don’t get us, the irregular income does! Actually after all these years I’ve figured out a pretty good system that works well most of the time. Finances are just tricky! And like everything else, they change! Just when you get a good system, it changes!

  2. What a great list of tips! Tip #9 changes saving money from being a duty into something that can be taken more lightheartedly. Along those lines one thing that can be very helpful is setting a certain amount aside, either every month or week depending on what your personal budget will allow, to treat yourself. This can be anything from a soda that is not on the grocery list to a fun tshirt. Having a sense of reward is important to keeping to the budget.
    Jay McInnes, a Vanvouver Realtor recently posted…Vancouver Real Estate Price Reductions, the good the bad & the sometimes ugly…..My Profile

    • Absolutely set aside money for fun. We know we’re going to spend it anyway! May as well factor it in and take the guilt away. Thanks, Jay. That’s a great addition.

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