You Set a Budget… Now, How Do You Actually Stick to It?

Congratulations! You’ve officially set a budget and now know exactly how much you can spend on non-essentials. But, how are you going to force yourself to stick to the plan if (or when) you slip up? 

Budgeting is a lot like dieting. Even people with the best intentions can slip up. Here are seven ways that could help you bolster your chances of success.

Tip #1: Track spending (there are apps!)

The more you know about your spending habits, the better equipped you’ll be to control them. Personal finance and budget apps can help provide you with continuous insight into how you spend by pulling information from the bank accounts and credit cards that you link. Often just seeing proof that you spend $50 a month on coffee at the local cafe or $500 per month on impulse clothing purchases can be enough motivation to change your habits.

Tip #2: Try the envelope method

The envelope method is a monthly budgeting approach that sets strict limits on expenditure categories and mostly eliminates credit and debit card spending. 

Here’s how it works: 

First, subtract all the large, regular expenses that you can’t pay in cash from your available income — like your mortgage, health insurance, car payments, utilities, etc. Then, you divide what’s left into categories and create separate envelopes for each. For instance, you can create individual envelopes for transportation, groceries, clothes, entertainment and eating out.

"Ask your spouse, close friend, or family member to help you stick to a budget."

Then, place enough money in each envelope to cover these monthly expenditures. When you spend the money for the month, it’s gone. If you’re looking to stick to exactly what you set aside per category, once it’s out it’s out. If you’re better with being guided by an overall limit and find you’ve overspent in one category you could consider taking the overage out another category’s available cash but stay within bounds of the month’s total spend. Now, if you have money left over, you can either roll it over into the next month or put it into savings.

Tip #3: Keep an eye on credit cards

If credit or debit cards are a little more tempting to use than you’d like, some strategies you can use to keep them in check could include things like leaving your plastics at home make them inaccessible (lock them in a safe, put them in the bottom of your freezer, hide them under your mattress) so you have time to pause before a purchase and ask “Is it really worth it?”  

If you prefer not to carry cash, you can carry prepaid cards in amounts that fit your budget.

Tip #4: Find a budget buddy

Ask your spouse, close friend, or family member to help you stick to a budget. Call them when you’re tempted to splurge. They might be able to help you.

Tip #5: Define your goal

Find photos representing the things you want to do with the money you save from budgeting. Whether it’s finding a better apartment, taking your dream vacation, or buying a new car, being able to visualize your goals can help you stay on track. It’ll remind you why it’s worth it to pass on another pair of shoes.

Tip #6: Track your success

Every month, sit down and evaluate how you did in meeting your budgeting goals. How much did you save? Were there parts of your budget where you over- or under-spent? How did you do, compared to last month?

Tip #7: Plan small rewards for meeting goals

Are you getting stressed about all this penny-pinching?

Consider adding small rewards every time you meet a major goal. Did you hit the $1,000 saving mark this month? Splurge on movie tickets or a modestly-priced lunch out, if your budget allows. Have you been good about bringing your lunch to work all month? Order an end-of-the-month latte to celebrate.

The key is to keep your rewards fun and inexpensive enough that they won’t blow all your hard work.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.