How to make a budget and stick to it

Learning how to make a budget isn't hard. It just takes some good advice, organisation and a calculator. Actually sticking to a budget though, can take some work. Working within a budget is really a trial and error process. Over time, you'll learn what makes you spend outside of your budget and what you can do to avoid those habits. This advice though, can help you start the process of sticking to your budget without making quite so many mistakes at first.

Change your spending behaviour

Many times when you overspend, it’s because you’re doing something that causes you to overspend.

Whether you buy on an impulse, never say no to friends who want to socialise at expensive restaurants, or fail to think through major purchases, learning to avoid the things that cause you to overspend is just as important as understanding how to make a budget in the first place!

Avoid spending-inducing situations

If you can’t go to a certain adorable boutique without buying at least one thing, just stop going there. You might have to just stop walking the High Street on weekends, or you may even have to take drastic measures like changing the route you take to and from work. This might seem a little dramatic, but you’ll be surprised at how quickly it can change your spending habits!

You can also avoid spending extra money by making friends with other frugal people or by letting your current friends know a bit about your budget. You don’t have to tell everyone you know that you’re learning how to make a budget, but talk to those people you usually go out with. Good friends will respect your need to restrict your socializing a little bit, and really good friends will come up with fun ways to get together without spending too much money.

Act on reason instead of emotion

This can be particularly difficult for some women, but men sometimes overspend because of emotions, too. Unless you've been planning a particular purchase for some time, listen in to what your brain is telling you. The emotional part of your brain might urge you to buy something that will supposedly make you feel better. When that happens, try and listen to your rational brain to make sure that you really need the item in question. If you don't need it, try and walk away.

Wait before buying anything

When you're first learning how to make a budget, impulse buying will be absolutely your worst enemy. This is why it's a great idea to wait twenty-four hours before making any major purchases, or even before making some minor ones. Next time you're at the makeup counter looking at lipsticks, go home first, look through your makeup drawer, and decide if you really need a new lipstick. This is even more important for larger purchases, like cars or electrical goods.

A good rule of thumb is that if you have a sudden impulse to purchase anything, you should sleep on it before making a move. You can always go back and get it the next day if you really do need it, but you'll probably end up buying a lot less stuff that you don't need this way.

Plan purchases ahead of time

Budgeting is really all about planning your spending. You don't have to have a list of everything you want to buy over the month, but you should make lists before you go shopping for anything. When you need to restock the kitchen cupboards, look through what you've already got and then make a list. When your kids start to outgrow their clothing, make a list of what they need before you go shopping. Lists will help you only buy what you really need and avoid impulsive spending.

When it comes to larger purchases, such as new electronics, a car or a home, you don't necessarily need to make a list, but you do need to prepare ahead of time. Figure out how much that new vehicle is going to cost you, and start saving up month by month. Don't feel pressured to buy before you can afford it - you'll end up with a lot less debt and a budget that is totally under control.

Find out what you love about budgeting

One of the biggest lifestyle changes you can make when you discover how to make a budget is to learn how to appreciate a simpler lifestyle. As you start living within your means, things will get hard sometimes. There will be lots of good things to enjoy, though. Start focusing on the good things about living on a budget, like being less stressed about your finances and building up a good credit score.

Make sure there is balance

When people first learn how to make a budget they often fail because they do too much too quickly. It’s a little like starting a new diet. If you take everything you love out of your diet all at once, you’ll inevitably lash out against the restrictions and probably end up worse off than you were before. Instead of cutting out all of your extra spending, give your budget a little wriggle room so that you can indulge in moderation. Knowing that you have control over your money and that you still get to do some things that you love will go a long way towards helping you stick to your budget.