How to Set Up a Budget and Stick to it

Budgeting is key to saving up for big goals, but it can be challenging to keep to. Learn how to set up a budget and stick to it in this HyperJar guide.
Amabel Polglase
March 8, 2023
min read

Learning how to set up a budget and stick to it will help you take control of your finances and work toward your savings goals. But as you might already be aware, budgeting is quite tricky and holding yourself accountable is more challenging than it initially seems. 

So, what’s the secret to budgeting? And how do you stick to the goals that you set out at the start of the year? 

In this guide, we introduce some helpful tips and strategies to help you budget better and stick to any financial resolutions you make for yourself and your family.

How to Set a Budget you can Stick to 

There are many different ways to create a budget, and you can even use tools and resources to help you if you’re unsure where to begin. As a starting point, you can follow these simple steps to create a straightforward budget: 

·  Step 1: Calculate your net income and determine how much money you must spend each month. 

·  Step 2: Track your spending and make a note of all of your core expenses, as well as non-essential expenses. 

·  Step 3: Set realistic goals that are SMART and make a provision for saving money each month. 

·  Step 4: Establish a plan based on your available money and the goals you want to achieve. 

·  Step 5: Make any necessary adjustments to your expenditure to meet your new targets set out in the budget. 

·  Step 6: Set a date to review your budget regularly – at least once a month. 

Check out our complete guide to creating a budget, where we walk through everything you need to know about putting a budget together that you can easily stick to throughout the year. 

Tips on How to Stick to a Budget

Frankly, it is easy to create a budget – but sticking to it is much more difficult. With that in mind, there are several things you can do to improve your chances of sticking to your budget, including the following:

Make your budget goals realistic

Goal setting is ingrained in budgeting, and like anything in life, if your goals are too challenging to achieve, you will struggle to meet them. Therefore, you must set realistic budget goals that you will likely keep throughout the year to keep yourself on course. For instance: 

·  Rather than aiming to clear off all of your debts, why not work on one credit card or one personal loan first? 

·  Instead of trying to save 50% of your income, why not reduce it to 20% per month? 

·  Don’t cut out all your non-essential expenses from your budget, as you need to enjoy life! Make sure you allocate some money every month to treat yourself. 

If your financial goals are realistic and achievable, sticking to your budget is much easier. 

Know what you’re saving for

Clarity is also extremely important when putting together a budget, and you need to be fully invested in what you’re saving for. Everyone is different, but you could save up for a new car, a deposit for a house, a wedding, or even a dream holiday

Frankly, it doesn’t matter what you’re saving for, but you need to be clear and passionate about saving enough money to meet your goal, whether you’re trying to save £20,000 in a year or if you’re keen to save enough money to pay for your dream wedding

Try a new budget challenge 

If you struggle with motivation, setting yourself a budget challenge is an excellent way to hold yourself accountable as you meet your financial goals. There are lots of different ways to incorporate saving challenges into your budget, and some of the following ideas are great ones to start with: 

·  No-spend month: A no-spend month is when you commit to a whole month of spending money only on essential costs, saving money on non-essentials. 

·  50-30-20: The 50-30-20 rule is a great way to calculate your budget. Simply, it allocates 50% of your income to needs, 30% to wants, and 20% to your savings and debt repayment. 

·  1p saving challenge: If saving money is a challenge for you, the 1p challenge is a good option. On day one, you save 1p; on day two, 2p; and on day three, 3p; and so on. It all quickly adds up and is a great way to save money throughout the year.

Make a weekly or monthly food budget 

Grocery shopping can be problematic when you’re sticking to a tight budget, as it can be so tempting to splash out on the latest offers when you go to the supermarket. But you need to be disciplined to avoid frivolous spending!

At the very least, you must set a weekly food budget and make a detailed list before shopping. If you find it easier, you could always do an online grocery shop to avoid temptation in the store. 

Our food budgeting blog will help you if you struggle to stick to your budget when the weekly grocery shop comes around. 

Pay yourself first 

Paying yourself first is a straightforward yet highly effective way of managing your finances. It’s the practice of taking a specific amount of money from your monthly paycheck that you use for a specific purpose, be it debt repayment or investment, for instance. 

The fact that you pay yourself first reduces the temptation to leave the money in your bank account for the entire month, which could lead you to spend it. Read our article on paying yourself first to see how you can incorporate the method into a successful budgeting strategy. 

Sleep on large and impulse purchases 

Impulse buys are a significant threat to your budget as they can eat away a significant amount of the money you have available each month. Worse still, they can even increase your debt if you opt to put the purchase on your credit card.

So, to avoid impulse purchases and frivolous spending, promise yourself that you will sleep on all big purchases over a specific amount of money, whether it’s £50, £100, or £1,000. 

The item will still be there in 24 hours, and giving yourself a day to think through the purchase will help you decide if it’s right for you and, crucially, whether you can afford it.

Budget with a friend 

Although budgeting is an individual endeavour for most people, budgeting with a partner or friend is a great way to hold one another to account. It’s much easier to meet your goals and targets when there are two of you involved in a budget, and it also makes managing your finances much more fun!

Why it’s Important to Budget and Save Better 

No matter what you’re saving for or how much money you have, creating a budget and sticking to it is essential. Whether your goal is to travel the world or to buy your first house, you need to create a budget to ensure that the money that you earn is put towards your financial goals and objectives.

The process of budgeting ensures that you use your money efficiently, and it reduces frivolous expenditures. 

It also ensures that every financial decision that you make throughout the year is in keeping with your aspirations and will contribute towards your overarching goals. Without a budget, you have no idea what your money is going towards, and, likely, your money isn’t working for you as well as it could. 

What Happens if You Break Your Budget?

While it’s really important to hold yourself to account and stick to your budget wherever possible, it’s also not a good idea to be too harsh on yourself. After all, we all make mistakes! So, if you break your budget one week or month, just look at ways of getting back on track and make any required adjustments. 

If you’re struggling to stick to your budget, discover how the HyperJar app can help you create and work through your budget from month to month, no matter your savings goals and aspirations.

Amabel Polglase

Chief Marketing Officer

Amabel has diverse experience in business, marketing and entrepreneurship, including founding her own successful startup. She served in several senior leadership roles prior to joining HyperJar including Zilch and Curve Card where she led brand, marketing and communications. Before joining the fintech revolution, Amabel was a managing global client partner at Facebook and prior to that at McCann-Erickson, the world’s largest ad network. She volunteers at Girls Out Loud, a charity created to empower and inspire teenage girls, and is also a mentor at The Girls’ Network. She received her MA in history and international relations from the University of St Andrews.

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