How to Create a Monthly Budget & Actually Stick to It
The past few months, my credit card bill was higher than expected—even before the holidays. With a new year, I decided it was time to get better about managing my money so today’s post is all about how to create a monthly budget because it’s easy, quick and totally works!
It’s made me so much more aware of my (sometimes frivolous) spending and much more conscious and grateful for all the things I already have in my life. And, I’m a nerd and I like a challenge, so it’s been fun to see how low I can go this month.
It’s been an interesting process and has made me realize where more of our money goes each month and overall, I think it’s worth doing for at least few months just to get a better handle on how much and where you spend your money.
If you want to know how to create a budget, you’re in luck! I’m walking you through the steps I took and wanted to share a few things that have made the process easier and less overwhelming. Plus, some tips around having a better money mindset!
How to Create a Monthly Budget
Budget at the Start of the Month
Take a look at what you have going on that month and plan for it. Maybe there’s travel coming up and you know you’re going to have to book flights, or maybe there’s a bunch of birthdays and gifts are something you to need to budget for. What’s great about doing this practice each month is that you can actually plan for THAT month because as we know, every month is different!
Get a Budgeting App
Years ago, I had the app Mint, so I just logged back into that account, added my accounts and got moving again. It’s pretty easy to set up a budget for yourself too. It allows you to set amounts for different categories—you can even get pretty detailed here. For the sake of making things easy, I just opted for the main category, which will make more sense once you’re logged in.
When there are transactions that come through that aren’t budgeted for, you can add these or drop them into the correct category. This is my first month trying it out and the weekly reminders and recaps have been so helpful! I take a look a couple times of week, and it’s definitely been eye-opening to realize that some days I’ve spent more than I realized without even noticing!
Get In Tune With Your Spending
Which brings me to my next point. I definitely got in a bad habit of handing over my card without paying attention or thinking about what else I’d purchased that day. Of course, some days are more expensive than others, that’s life, and I don’t want you to feel guilty about those days. That’s not the point. The goal is simply to become more aware and conscious of your spending.
Again, do not feel guilty about your spending! That is not the point of this. Instead, get in tune with it and feel good about what you’re buying. Maybe it’s a cup of coffee with a friend—sure, you could have saved money and made coffee at home, but think about the whole experience, the good conversation, how nice it was to leave the house—essentially allow yourself to feel good about what you do spend money on.
This will definitely make you aware of areas you can cut back though. Instead of feeling bad, brainstorm new ways to cut back in the future.
Use What You Have
Since the grocery was a big spending area for us, I’m trying to cut back on how much I buy. I cleaned out our pantry and freezer over the break and have been working on using up all the random bits of pasta, canned beans, etc. that I found in there. This is such a creative process for me to see how I can use stuff I have instead of just starting fresh at the store every week. I don’t know if this is technically budget tip, but it’s helping us buy less!
This goes for other ares too. It’ so easy to just buy something new—clothes, decor, accessories, etc. But, before you do that, take a look in your own home and see what you already have! Most of the time I realize that I really don’t need most of the stuff I buy!
Budget for your Money Goals
Maybe one of your goals is to put aside $1000 into a savings account, or investment account every month. Those are great goals to get you to your bigger financial goals, and they should absolutely be budget for! Having them in there from the start of every month makes it less of a shock when you have to transfer that money over.
This might seem scary because it’s just going into a pot you don’t really look at, but it should feel good to plan and invest in your future, so feel those feelings when you do it!
Admittedly, I LOVE Whole Foods, but it’s not cheap. I’ve decided that for a month, I’m going to shop at Trader Joe’s and only get meat/chicken/fish from Whole Foods. Sorry, don’t trust TJ’s for that stuff—I’m picky on quality.
Making a simple shift like this one can have a huge impacts on your budget each month. I know that for us, it’s already made a big difference! My typical bill at Whole Foods was around $125-150 a week, and I just did the same thing at Trader Joe’s for about $80. That adds up!
Track your Spending
I like to do this once or twice a week. I log into my Mint app, or if you’re using an Excel spreadsheet, that works too, and pop everything into place and make sure it’s categorized correctly.
When you budget monthly expenses on a regular basis, you become so much more aware and in tune with your spending. You see where it goes, and what areas you might need to cut back on the following week to stay within your budget.
If you’re not tracking your spending on a regular basis, a budget is basically worthless! You have to know what you’re spending to stay within your budget, so set aside a half hour each week (maybe Sunday morning) to make it happen.
Create an Abundance Mindset
Again, this is not about feeling bad about how much we’re spending! Changing your mindset from guilt and fear to abundance and wealth starts with simple thinking and re-framing.
When you’re feeling bad about your money, stop and think about you do have. When you start to feel happiness with everything you do have, it actually makes it easier to not buy excess stuff. Just think about what you can do with your saved money too!
Set it aside for a family trip, invest it, or put it in a college fund, and FEEL GOOD when you do it. Close your eyes and feel how it will be when you’re on that trip or able to afford college or retire early. Feeling good feels good and attracts more good into your life!
Do you set a budget each month? What tips have helped keep you on track?