How to Stick With a Budget


Budgets have always been a tough sell.  However, in workshops I teach around the country, I’ve noticed a hopeful sign.

Instead of flat out resisting the idea, more and more people are asking questions about how to stick with a budget.  They’ve crawled (or were pushed!) over the first hurdle of starting a budget.  Now they need help staying the course.

Here are some suggestions:

Know the Goal

No one wakes up in the morning excited about the idea of putting together a budget.  Using a budget is not the goal.  A budget is a means to the goal.

Do you want to buy a house?  Become debt-free?  Take a special trip?

Now those are goals that’ll get you up in the morning, and using a budget will help you get there.

Choose the Right Budget Tool

Using a budget does take some work.  There’s no getting around that.  However, some budget tools fit certain people better than others, so make sure you’re using the tool that’s easiest for you.  Here are the main choices:

Paper and pencil.  As the name suggests, this is a purely manual system where you develop a written spending plan and then write down how much you actually spend each day.  It’s one of the simplest systems to use, requiring no software training.  Try a Budget Quick Start Guide!

The envelope system.  Once you set an overall plan for your monthly income, this system will make it really easy to see how well you’re staying within your budget.  Let’s say you have $80 budgeted for clothing.  If you get paid once a month, you would deposit your paycheck into your checking account and then withdraw $80 in cash for your “clothing” envelope.  When you go clothes shopping, you take that envelope with you, pay with that cash, and put any change back into that envelope.

Need to see how much more you can spend on clothing at any point in the month?  Just look inside your “clothing” envelope and count the cash.

You wouldn’t use envelopes for every category, but for groceries, clothing, entertainment, and many others, the envelope system works really well.

If this system sounds appealing, read this comprehensive guide to the envelope system.

Budget software.  Quicken dominates this space, but there are other players as well, including You Need a Budget.  Such products cost money, but they offer the most extensive analysis tools, which may appeal to you if you’re very detail oriented.

Online tools.  Personal Capital, MintMoney Strands, and Adaptu are all free online tools to help you. One fee-based online budget tool is mvelopes, which bills itself as an online envelope system.

We use Mint in our household and I’m very happy with it.  Since it’s online, I’m no longer tethered to one computer, as was the case when we used Quicken.  It’s not as detailed as Quicken, but it gives me what I need.  I like the fact that it automatically categorizes a lot of our transactions, and, at any point in the month, it tells me really quickly how we’re doing in each of our budget categories.

Expect Some Challenges

One issue that a lot of first-time budgeters face is they forget to record what they spent for a day or two, get frustrated, and quit.  One of the most helpful features of a Cash Flow Plan document used in a paper and pencil system is the row of numbers at the bottom.  Those are the days of the month.  After you record each day’s spending, cross off that day’s date as a reminder that you are current.

As a Mint user, I’m in the habit of checking our budget first thing each morning, mostly to see if recent transactions have been categorized correctly.  At first, you might have to put that task on your calendar, but eventually it’ll become a habit.

Another common issue is forgetting to plan for certain expenses, like home and vehicle maintenance.

Be Flexible

Non-budgeters imagine budgets as rigid and constraining, but the best budgets are designed with some flexibility.  For example, don’t get all worried about trying to figure out if that take-out food you had for dinner last night should be categorized as “groceries” or “entertainment.”  If your grocery budget is almost tapped out, call it entertainment.  If you’re running out of room in your entertainment budget, call it groceries.

You won’t get the budgeting thing down to a science right away.  No one does.  But stick with it.  Over time, as you start to experience the many benefits of a budget, like a much greater sense of control over your finances, you’ll be motivated to keep going.

If you use a budget, what other keys have you discovered that help you stick with it?

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  1. Nate

    I like that you mention that the budget is the means and not the end which is true so thanks. The end goal helps us with our budget. Really the result of using a budget is motivating to us because we feel rewarded with the results if we stick with our budget.

    As a side note, the envelope system was hard for us. It just didn’t work. We use our free Vertex42 budget sheets and that’s been fine for us. We used the Money Manager which is a spreadsheet that has strengths similar to the Quicken system.

    • Matt Bell

      Nate – Thanks for sharing this info about Vertex42. I hadn’t heard of it before.

  2. 20's Finances

    I think it is great that you included being flexible. The people who stick with budgeting are the ones who keep changing it to fit their preferences.

  3. Matt Bell

    20’s – Absolutely. And I think it’s what holds people back from even trying a budget. They think it’s something that’ll rule them. But circumstances change, goals change. So, a budget needs to adapt to fit our circumstances and what we’re trying to accomplish.

  4. sokun

    Great post, i’ve managed to start budgeting and it has worked out well so far. I don’t have any real goal but hopefully i can start implementing this and have a goal.

    • Matt Bell

      sokun – It’s great that you’ve started to use a budget and that it’s working out well so far. Great job! I’m confident that as you decide on goals you’re excited about, they’ll help you stick with the budget over the long run.

  5. My Financial Life Coach

    I totally agree with you about how important it is to establish the goals so they have the desire to stick to it. I came up with a quote a long time ago that I share with everyone I coach:

    “Let your goals (vision) dictate your budget, not your budget dictate your goals.” – Bryan Cooper

    I start the first session with them spelling out exactly what is really important to them. These goals now go from being just goals – to a desired state of life. As we work through their goals they start shifting from “stuff” to how they want to spend their time with friends and loved ones. These goals are now their compass to get to, and to start living, the life that is really important to them.

    This creates the passion they need to stick to the budget because they see that the only way to get to their dreams is by sticking to their budget. Budgets are so much more than just getting out of debt, it is about getting out of life what is important to you.

    Great post.

    Bryan Cooper
    My Financial Life Coach

    • Matt Bell

      Great stuff, Bryan. We’re kindred spirits in that I do something very similar in my workshops – have people think about some of their financial goals early on because that’s fairly easy for all of us to get our minds around, but then move the conversation to life purpose sorts of things. The budget is the means to the specific goals and the specific goals help us fulfill our life purpose.

  6. JoolieH

    The biggest hurdle I face is I end up tracking where I spent my money instead of directing it. It’s a trap I fall into time and again. So I have quit trying to budget as long as everything is getting paid on time and our debt is going away.

    • Matt Bell

      JoolieH – You’re bringing up one of the most important points about budgeting. Using one well is about more than just looking to see where all the money went at the end of a month. It’s about proactively “managing to the number” in each category. And that means looking to see how we’re doing against our spending goals/limits throughout the month, and especially before we go to the store to make a purchase. That’s what I like about using Mint. It takes less than a minute to log on and see how we’re doing in each category.

      It’s great that you’re paying everything on time and making progress on getting out of debt. If you wanted to give the budgeting thing another try, I’d just encourage you to use a tool that makes it simpler to see how you’re doing whenever you’d like to.

  7. Matt Bell

    Churches – I’m sure you’re not the only one who has been tripped up by “unexpected things.” Many of those unexpected things can be covered by budgeting monthly amounts for home and vehicle maintenance. You won’t use all of the budgeted amounts each month, so you can either let unused money build up in your checking account, or, even better, you could keep such money in a separate savings account for periodic bills and expenses. See this post:

    Another category that can cover unexpected expenses is a miscellaneous category. Other than that, keep a record of what those unexpected expenses tend to be and create additional categories. The more you can plan for such things, the less unexpected they will be and the smoother your budget will run.

  8. chris

    We have a Wedding Photography business in Las Vegas and I found a free program to budget our small business. It’s called Wave Accounting. Helps with my business bookkeeping and budget.