How to Make a Budget and Actually Stick to It
The short answer
Write down what comes in each month and what goes out, then subtract. The number should be above zero. [2] Plan each month at the start, write down what you spend each day, and check how you did at month’s end. [2] A budget sticks when it’s realistic, easy to track and tied to a goal. [1]
Step 1: Gather your bills and pay stubs
Start with the paperwork. [2] You’ll need:
- Pay stubs, plus any other money you get, such as child support [2]
- Your regular bills: rent, utilities, phone [2]
- A month of bank or card statements for everything else
If your pay changes month to month, add up last year’s income and divide by 12 for a monthly estimate. [2]
Step 2: List where your money goes
Write down your bills and other spending, like food, gas, clothes and entertainment. [2] This is the hardest step. If it feels like too much, start small and look at one week at a time using receipts or your bank account. [1] Small daily costs, like buying lunch, add up over time, so include them. [1]
Step 3: Note when bills are due
If you come up short at the end of the month, your bill dates and paydays might not line up. [1] Mark due dates on a calendar so you know which weeks to go easy. Missing payments can hurt your credit scores. [1]
Step 4: Subtract and adjust
Subtract your monthly bills and expenses from your monthly income. If the number is below zero, you’re spending more than you make, so look for things to change. [2] If there’s money left, you can save it. You can even list savings as one of your expenses. [2]
How to stick to it
Use it every month. At the start of the month, plan your spending. Each day, write down what you spent. At the end, compare and use what you learn to plan next month. [2]
Make tracking easy. Pick a method you’ll keep up, whether that’s a daily journal or a folder of receipts you review each week. [1]
Look for your cut-back spots. Reviewing your spending is the easiest way to find places to trim. If you’re prone to impulse buys, make a doable plan to limit them. [1]
Set a goal. Small or large, a goal gives you something to work toward. Small rewards along the way help too. [1]
Get support. Like sticking to an exercise routine, it’s easier with family or friends who’ll budget with you or listen when it’s hard. [1]
Update it when life changes. A new job or a change in spending habits means it’s time to redo the numbers. [1]
Keep going
Our Budget Hive has more money basics, including how to make a budget with ChatGPT and credit reports vs. credit scores. If you’d rather track on paper, the Budget Tracker printable is in our shop.
Make it easier
Want it on paper? Use the Budget Tracker to keep track as you go.
Not financial advice.
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