How To Make A Budget And Stick To It

Do you struggle with making a budget and sticking to it? If you are, don’t worry, you’re not alone.

In this article I will detail how to make a budget and stick to it. This is the method that I personally use, and it works.

You’ll find out how to make a budget that is tailored to your spending habits, as well as a few ways to stay on track.

Let’s get into it shall we?

Necessary expenses


Write down all of your necessary expenses. Things like rent, utilities, groceries, transportation. Whatever it is that you NEED to live at a basic level.

Next, think of ways that you could potentially cut down on these costs.

  • Move to a smaller/cheaper place to save on rent
  • Save power, or move to a different plan or company to reduce your utility bills
  • Carpool, cycle, or use public transport to cut down on transportation costs
  • Plan your meals in advance and make your own meals at home.

Are you really using everything that you’re paying for? Really consider what you could realistically do without.

If you find it hard to rustle up the cash to pay for your annual bills, like insurance payments, make sure you calculate how much that would cost you per week and add it to you budget.

Sometimes you can get discounts when paying lump sums like this, so if you can budget for those throughout the year it’s more money in your back pocket.

Things that don’t qualify include:

  • Gym memberships (workout at home)
  • Subscriptions that aren’t necessary for your business or livelihood (e.g.. Spotify, though I hate to say it!)
  • Eating out

Once you have this list you have your ‘survival’ budget.

The idea of this budget is that you COULD live on it, but ideally not indefinitely. It’s useful if your financial situation is dire, or you need to save a lot of money quickly.

Be realistic

Here’s where the ‘sticking to it’ part comes in. Following the above style of budget just isn’t doable for a long period. By allowing yourself a bit of wriggle room and having some extra cash on hand you ensure that you can still have a life.

In order to see what you tend to spend on extras take a look at your transactions for the last 30 days. You’re just looking for an average so ignore any one off payments. I personally tend to spend a bit too much on eating out and concerts. You can start by simply reducing what you spend within these categories by, say, 20%. The following month drop it down another 20%. Eventually you’ll find a sweet spot. You’ll really have to start prioritising that spending and learn that you can’t have it all (opportunity cost).


How much extra you allow yourself should be closely related to your financial goals. Just remember the less you save, the longer it’s going to take to reach your goals!

You need to allow for unexpected costs as well. These can be a pain and throw your budget off course, but just do your best to stick to the plan. Don’t use these as an excuse to go off the rails and spend up large!

Automate your payments

I’ve already covered this in my mail & bills post, but it’s applicable here as well.

Automating your payments means that your bills are all paid automatically. Consider setting up an automatic payment to go into your savings. This is essentially treating your savings as just another bill to be paid.

Screen shot of 'automatic payment' from Westpac site

Pay yourself first!

By making all your payments coming out automatically, you won’t have a chance to spend your money on anything else.

You’ll be ‘forcing’ yourself to stick to budget!

Of course this isn’t a perfect system. You’re still going to need access to emergency cash, and if that cash is to remain in your account you’re going to have to rely on a little self-discipline.

Remind yourself of your goals

Another great way to keep on track with your budget is to consider your goals before each purchase you make.

Ask yourself, “Do I really need this?”, “Is there a way I can accomplish this task for less, or even for free”, or “Is this contributing to my long term vision, or is it just a short term want?”


It’s called delayed gratification, and it’s about sacrificing short term instant gratification which only provides one with temporary fleeting happiness, with the much more enduring happiness of achieving something you worked hard to get.

I think the best way to do this is to keep your goals on your phone, so when you’re out shopping and temptation kicks in you have something right there to remind you. I personally use the app Wunderlist.

Another way is to do up a dream board, essentially a collage of where you want to be. You can keep this at home, but take a photo of it and make it your background on your phone so it’s always there.


Let’s have a bit of a recap shall we?

Creating a budget first involves figuring out what your necessary expenses are, and thinking of ways to reduce them. It involves really assessing whether something is giving you enough value, or are you just throwing money at it (like an unused gym membership).

Once you have your framework, you can start adding back in some of your more frivolous spending by looking at your list of transactions for the last 30 days and allowing for that spending, but at a reduced rate.

Try to automate as many of your expenditures as you can. If you don’t see it, you can’t spend it!

Lastly, get some form of reminder of your goals on your phone whether it’s a photo of a dream board or just listed in a place like Wunderlist. This will help hold you accountable and should deter the majority of unnecessary spending.

I hope that this article has been helpful.

Let me know about how you go about making a budget, ( or tips on how to stick to one!) in the comments!

All the best,