Learning how to stick to your budget is much easier if you already know how to track expenses. Taking some time to learn best budgeting practices means you will be more likely to stick to your budget and effectively limit your spending.
Spend Below Your Means
An inability to limit spending can lead to difficulties sticking to your budget. If you understand your monthly income, make sure your budget has you spending less than that amount. Savings and regular expenses will likely be at the top of the budget, and everything else can happen once you have met your monthly financial goals.
You may find you need to cut back on some things, such as eating out, but this gives you the freedom of not having to worry about whether you can make rent each month. One adjustment that can help you spend below your means is by refinancing your student loans. If you’re considering this option, it’s a good idea to understand the impact on your credit score. Lenders may run soft or hard credit inquiries, and these can affect your credit score. Before you apply for anything, you can review a guide with information on the differences between these inquiries.
Keep All Your Receipts
If you’re like most people, you likely use multiple methods of payment for your expenses. Many people have multiple credit cards, and they sometimes use online payment providers as well. This can make it harder to record what you spend, particularly if you don’t receive a receipt. Try to organize your receipts and keep all your receipts in one place, which will help you keep more accurate records. If you have spent too much in one category, you can then go back to see where you need to cut back. This also helps when it comes time to do your taxes. If you have an accountant, they may ask for receipts when it comes time to file taxes.
Allocate Extra Money
Your budget may have some built-in wiggle room, and some months, you may find you didn’t spend everything from each category. Think of ways you can put that money to use, instead of splurging on yourself. You could put the extra into an emergency account, which can be used if your spending goes over budget one month. You could also put it in a savings account, where it can earn interest, or you could put it toward financial goals, such as travel or investing.
Being accountable to others might help you develop the necessary discipline to stick to your budget. You may have a trusted family member or friend who can help you stay accountable. If you find it is difficult to stick to your budget, you can have them give you a call on a regular basis to ensure you are sticking to your goals. This helps you improve discipline, which is especially important if you are saving for a large purchase, such as a car, house, vacation, or college tuition.