5 Tips for Sticking to a Budget

Creating a budget is a critical first step in managing your finances, but when it comes to sticking to that budget, many people struggle. The key is understanding what you need out of your budget and then being realistic about how you can achieve that.

Let’s explore how to create a budget, including practical strategies for maintaining it, avoiding overspending and staying on track with financial goals.

Why sticking to a budget matters

Budgets may seem like a tedious or overwhelming way to manage money, but they truly are a workhorse. With the right budget, you may:

• Avoid overspending
• Build savings
• Pay down debt
• Reduce financial stress
• Stay aligned with long-term goals

Of course, these benefits can only come from sticking to your budget.

Tips for sticking to a budget

If you’ve had trouble sticking to your budget in the past, or you’re just starting to manage your own finances, here are 5 financial planning strategies to stay on track:

1. Track your spending regularly

It can be easy to spend money without realizing it if you aren’t regularly tracking and reviewing your spending. That’s especially true if you use different credit cards on a regular basis. By tracking your spending across categories, you may get a better idea of how well you’re sticking to your budget and be able to adjust as needed.

2. Use budgeting tools or apps

Budgeting tools and apps can help you build your budget and update it as your circumstances change. Plus, these may let you connect to your other accounts so that you can track your spending across multiple cards in a single platform.

3. Review and adjust your budget monthly

Budgets are meant to grow and change alongside your needs. Reviewing your budget each month and making necessary adjustments can help ensure it remains realistic over time.

4. Prioritize needs over wants

Everyone wants to have fun, but when it comes to budgets, function should come first. That means ensuring that you can cover your needs before assigning money toward fun. That way, when you do spend money on wants, you can be confident that it won’t come at the expense of something vital.

5. Automate savings and bill payments

The less effort you have to put into savings and bills, the more likely you’ll be to stick to your goals. Signing up for autopay and setting up automatic transfers to your savings account can help you ensure that you’ll pay your bills — and yourself — on time.

Setting a budget you can stick to

When it comes to creating a realistic budget, flexibility is the name of the game. There are several ways you might accomplish this:

• Start with income and fixed expenses: By understanding exactly how much you make each month and how much you spend on essential expenses, you’ll know how much is left over for discretionary expenses.
• Set spending limits for variable categories: Some expenses may vary from month to month, which can be trickier to budget for. By setting spending limits on those expenses, you may be better positioned to stick to your overall budget. You may also consider creating a small buffer of unassigned funds that can pick up the slack if your necessary expenses fluctuate.
• Include room for unexpected costs: A budget that doesn’t account for the unexpected can easily get off track. Be sure to prepare for those costs by setting up a dedicated emergency fund. The amount you save will depend on your needs, but experts typically suggest aiming to cover 3 to 6 months’ worth of necessities.
• Make sure your budget supports your goals: An effective budget is one you want to stick to. By shaping it around your goals and seeing progress, you may be more likely to stay on track.

Common challenges with sticking to a budget

Budgets can have a reputation for being difficult to stick to. Knowing the common obstacles that can arise when you start budgeting can help you keep to your plans.

For example, it’s easy to underestimate your expenses. Reviewing your spending habits over the past 3 to 6 months can help you be more accurate when determining how much to allocate toward each expense.

Impulse spending can be another challenge for those who aren’t used to being more intentional about their spending. This can be minimized by:

• Identifying when you tend to impulse buy items and avoiding those situations
• Removing saved credit card details from your browser
• Implementing a waiting period, such as 3 days, to purchase items that fall outside of your spending plan

Skipping the tracking part of the budgeting process can also be a mistake, allowing impulse spending and other expense deviations to derail your plans. To remedy this, you may consider dedicating time each week to review your spending and make sure that it aligns with your budget.

Finally, although it can be tempting, budgeting too rigidly can be exhausting and make it difficult to accommodate unexpected expenses. By building in flexibility for when your plans change, you can set yourself up for budgeting success. After all, the best budget is the one you can stick to.

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.