How to stick to a budget: A simple guide

A simple fact rules everyone’s financial life: You only have so many dollars in your bank account to pay for your needs, from house payments to haircuts and everything in between. So how do you help make sure you have enough money to cover all your needs and some of your wants? That’s where a budget comes in. 

Setting aside a certain amount for every spending category in your life and determining where your money goes—and, just as importantly, doesn’t go—can help you spend smartly, save more and avoid debt.

Of course, making a budget takes time. But the real trick is in following your budget. Learning how to stick to a budget takes practice. 

Enter this handy guide, in which we break down everything you need to know about how to stick to a budget with expert advice from budgeting professionals.

What are the best arguments for learning how to stick to a budget? For starters, being financially responsible means you don’t come up short when bills come due. Paying your bills on time is a money-saver. You can avoid late fees and extra charges that pile up because you fall behind on a payment. 

Budgeting also makes it far more likely that you’ll meet your long-term financial goals, says Tawnya Schultz, founder of a personal finance website. Planning how to spend your money makes it harder to spend too much in certain categories—say, restaurant meals or clothing—so you’ll have enough left over for goals like taking a vacation or buying a car.

A budget not only helps guide your spending; it can also help you build an emergency savings fund. Financial pros recommend having at least three months’ worth of the money you need to live saved in case of an emergency like an unexpected medical bill or a job loss.   

You can give your emergency fund some serious growth with a great rate from the Capital One 360 Performance Savings account.

Figuring out how to stick to a budget means setting realistic goals. For example, while saving 50% of your monthly paycheck might look good on paper, that’s probably not doable. Instead, it makes more sense to look closely at where your money is going now and find areas where you can spend less. 

“Having a budget should make you feel in control, like you’re doing something good for yourself,” Schultz says. “It can even be fun if you turn it into a game.” 

For instance, whenever you come in under your target expense number, treat yourself to something you’ve wanted to buy, like new shoes or concert tickets. Whatever your budget strategy, add realistic goals with a sense of fun.

Even the most realistic budgets need to be flexible, says Carrie Friedberg, a financial coach and Certified Financial Behavior Specialist (FBS) for a financial coaching website. “You need to do the math: income minus expenses plus bills. Is the result a positive number, or does it look like you’re going to take out too much money or rely on credit cards? If you’re facing a shortfall, something is going to have to give. You need to adjust your spending plan by increasing income, reducing expenses, sourcing creative solutions to your needs or negotiating,” she says.

In other words, a budget doesn’t exist on its own. It should reflect what really matters to you so that you have a better chance of sticking to your goals. Planning to spend and save wisely can go a long way toward setting you up for long-term financial success.

Now for the real work of learning how to stick to a budget. Update your thinking: Staying on budget is a positive—a chance to stay financially comfortable, build good habits and improve your spending rather than limit it, Friedberg says.

“You’re aiming to remain connected to your money and give your money purpose,” she says. Here are nine tips to help you do just that.

Schultz’s tip: Split up your paycheck—or any other money you receive—as soon as it lands in your account. The idea is to consider which bills you need that income to cover before you get paid again. Looking ahead can help you stick to that plan. “If you’re set up a month in advance, you should already know which check is covering which expense,” she says (assuming your paydays are semimonthly or biweekly). “For example, if your gas budget is $500 each month, you know you can use $250 in the beginning, with the first paycheck, and $250 in the second half of the month, with your second paycheck.” Your money shouldn’t sit in your account without a plan—that makes it too easy to spend in unplanned ways.

Alicia Durham, a personal finance coach, says many people misunderstand the valuable advice to “budget to zero.” Zero-sum budgeting doesn’t mean you should spend all your money and live paycheck to paycheck. Instead, it’s “assigning every dollar to a job,” she explains. “Some dollars are assigned to save. Some stay in your checking account as a buffer. Some are meant for short-term needs, like buying groceries, while others are for big-picture expenses, like home improvements. It’s not about spending every dollar but allocating every dollar and being intentional with your money.”

One smart way to help make sure your bills are always paid is to move that responsibility to your bank. Setting up auto transfers or auto bill pay from your bank account helps make sure you pay bills on time, Durham says. Separating your day-to-day spending from your bill payments and automatically putting money into savings will help you keep these categories distinct. Capital One’s Paycheck Percentage tool offers a simple, hands-off approach to building your savings every time you get paid.

Where does a lot of our money end up going? Look no further than your kitchen—or your favorite neighborhood restaurant. Everyone needs to eat, and it’s easy to overspend on food without a plan. “How often do we go to a grocery store without a list and feel anxious or struggle to manage our spending?” Schultz asks. 

Luckily, there are many good meal planning tools you can find online for free, some of which allow you to make a list of your upcoming meals and plan your shopping for specific meals. And when it comes to eating out, it’s important to keep your budget top of mind. Schultz says, “Ideally, you want to spend no more than 5% to 15% of your take-home pay on food, including eating out and groceries.”

Durham suggests creating the usual monthly budget—but then dividing up day-to-day expenses across the weeks within that month. “It helps you pace your spending a bit,” she says. “It’s especially helpful for people who are paid once a month, so you can avoid spending all of it right away.”

When possible, don’t pay all your bills at once. If you find too many of your bills are due at the same time, try planning to pay some bills early or call a few of your creditors and see if you can change your regular due date. “Have a few due dates at the beginning of the month and a few at the halfway point,” Durham says. “You don’t want a feast-or-famine cycle throughout the month.” If you can’t get your due dates moved, try to prepare. Make sure you have enough money saved to cover your bills and needs between paychecks, she suggests.

You don’t need to stay locked indoors to make your budget work. The key is to plan for fun and to spend time with others within your budget. Durham says a budget should “give you the freedom to spend,” adding that social people should set aside money specifically for going out. Have a plan for social events rather than spending money marked for something else on a whim. Assign money within your budget to spend with those you love, then stick to what you can realistically spend within your budget on those outings.

Also, take care to avoid what Durham calls “reactive spending.” Say you have enough money budgeted to order takeout once a week. If you’ve already ordered takeout that week but don’t feel like cooking, pop a frozen pizza in the oven rather than break your budget by ordering in again. The same rule applies to spur-of-the-moment social gatherings, which can cut into your budget fast. 

Durham has excellent advice for when you’re struggling not to splurge on a new outfit or weekend getaway: “I like to think of it not as a ‘no’ but as a ‘yes’ toward your greater goals,” she says. If you’re saving for that long-awaited trip to Paris but that hot new concert ticket looks mighty tempting, try to reframe your thinking: It’s not that you don’t get to go to the show; it’s that you do get to go to the City of Lights. Suddenly, you’ve just turned a negative into a positive—and kept your budget intact.

Meanwhile, if you don’t have room in this month’s budget for that concert ticket, you might still catch the artist the next time they come to your city. Don’t focus on the “no,” but on what you do get to do. “Pausing is a very powerful financial tool,” Friedberg says. 

“It’s easy to get into a credit card debt spiral,” Schultz explains. “It’s about knowing yourself and your habits.” She recommends taking a good look at how you’re using—and paying off—your credit cards. In a perfect world, you should pay off your credit card balances in full each month to avoid paying interest. But that’s not always easy or possible.

While using a credit card can be a pathway to earning travel points or other perks, chasing those benefits can also rack up debt if you’re not spending carefully. If you find that credit card debt is a problem for you, make the cards harder to access. Try keeping them in a drawer at home instead of your wallet now and then “so it’s less easy to pull them out if you see something you want,” Schultz says.

You should also figure out what’s causing you to use a credit card and see if there are ways to avoid relying on credit. For example, can you cut down your expenses and add more money to your savings or checking account to pay for purchases? Then you can plan to pay for most of your expenses in cash or with your debit card—a good way to stick to your budget.

Wondering how to stick to your budget when you’re eager to spend money on something? Build in measures where you have to answer to yourself, Durham says. “I like to say budgets require the 3 P’s: practice, persistence and people.” For the first two, continuing to update and follow your budget makes it easier to continue budgeting. “If you want to do anything in life but don’t have a plan, you’re likely not going to get there,” Schultz says. “Just like doing a push-up once won’t get you the results you want, creating a budget once won’t, either.” 

The third P involves leaning on people in your life who will support your spending and budgeting habits. “You can look to your friends, to social media—there are tons of groups that can keep you thinking about your goals—or to financial coaches to set up manageable systems for you,” Durham says. “The key is to find people who lift you up.”

If going over your budget becomes a pattern, change your budget. Think about ways to raise your income or lower your expenses. 

Also, track your spending by reading through your credit card and bank account statements. This can help you spot times where you’re not following your budget or catch places where your bills and spending are higher.

No matter how you stick to a budget, remember the most important part: It’s meant to make your life easier, not harder.

• A budget works best when it’s realistic, giving every dollar a role while leaving room for the things you enjoy. 

• Small, steady habits—like automating bills, planning purchases and tracking spending—can make it easier to stick to your budget. 

• Reviewing and updating your budget regularly can help you stay on track as your income, expenses and financial goals change.

“Making progress with your budget can give you a sense of control and peace around your finances that you might never have had,” Schultz says. “It enables you to enjoy your life more. Before I had a budget, I was constantly swirling about whether I could spend money, and using up that mental energy can drain you. Now, I never have to think about it.” 

Once you’ve got a budget in place, the next step is making sure your banking works just as hard for you. Capital One’s online process lets you open a 360 Performance Savings account from your couch in about 5 minutes.