Monday, March 15, 2010

How to Stick to a Budget

I have written posts previously about how to create a budget, but this post is about how to stick to your budget. Once you have figured out what your budget is for each category each month, you can create a simple chart and use it to keep you updated on where you stand.

The categories Lee and I use are:
Housing (Mortgage/Rent, Insurance, Utilities, Household Maintenance Things, HOAs)
Auto (Payments, Insurance, Gas, Repairs, Auto Maintenance Things)
Debts (Anything you pay on each month, ie student loans, same-as-cash things)
Entertainment/Recreation (anything we do for fun, excluding eating out)
Eating Out
Misc (anything that doesn't have a category)

We created an excel spreadsheet with the categories across the top and the days of the month going down the left side. We put a total row on the bottom and entered in the functions to calculate as we put information in. We also set up a row below that with our budgeted amount for each category. Then we put a row below that to show the difference.

If you would like a blank worksheet to use please let me know (

The key to a budget is not in creating it, but in sticking to it.

More Tips for Sticking to a Budget:

Set each budgeted amount at a reasonable level-
Go back and see what you've spent in the previous months and then create a number that is obtainable. You can always make it lower the next month to help you get more under control. If you make it too low, you will get discouraged.

Aim to do really well the beginning of the month -
It's a lot easier to stick to your budget when you work really hard at the beginning of the month. Even if the end of the month gets a little more spendy, you were off to a good start.

Remember that if you do go over in one category, you can pull funds from a different category. For example, if we go out to eat a little too much one month, we usually have a little extra in another category.

Plug in the definite expenses and then see how much you have to "play with". For example, you know that you have car insurance of $50.00 and a car payment of $200.00 and a budgeted amount of $500.00. You have $250.00 for gas and other misc things that come up.

Use one main credit card. Lee and I use one credit card and we put basically everything on that. It helps because we get one bill for most of our expenditures and we can see each transaction anytime we need to to keep us on track. Plus we earn rewards.

Budgeting can actually be pretty fun. You know what you have to work with rather than freaking out when the bills come in. It's also fun when you see that you have stuck to your budget and have more money to put into savings. :)

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