First thing I want to say is I consider budgeting to be two categories:

  1. A budget which you make once and update as needed, to see if you’re living within your means and that your expenses are reflecting your values. If you purchased my Budget Spreadsheet, this is what I’m talking about.
  2. And tracking your expenses to see if you’re staying within your planned budget, which is something you’ll do multiple times a month forever.

Creating the budget is a little easier, you just need to get motivated once every few weeks or months, but staying within a planned budget is a little more difficult. Over the years, I’ve learned a few tips on making it easier to stay within a planned budget.

Keep it simple

I used to have so many different buckets set aside for different purchases, but that became too laborious to manage. Now I just have three buckets: Expenses, Discretionary, and Buffer.

Each paycheck I put the percentage that my budget spreadsheet says I need to set aside for expenses into my Expenses bucket.

Then as those expenses hit my account, I pull from the Expenses bucket to pay for them. Any purchases that happen outside of my budget spreadsheet expenses, come out of my discretionary bucket.

Keep a buffer in your account

The buffer is there just in case I underestimate my expenses, to keep from incurring any overdraft fees. I keep $1,000 extra in my account, but you may want more or less depending on your confidence in your estimation.

Be realistic about how much you need

A common trap to fall into when we get excited about building our wealth is cutting our expenses too much. It’s kind of like a crash diet; it’s unsustainable and eventually leads to binging and shame.

It will take trial and error to figure out how much you need in your discretionary bucket each pay period to feel satisfied. Don’t beat yourself up if you overspend, just go back to your budget, and adjust your expenses so that you can have more discretionary funds.

Combine tracking your finances with a pleasurable activity

If you associate tracking your finances with pleasure, you’re more likely to consistently do it. Make a cup of tea or coffee, get comfy on your couch, put on your favorite show or some good music, and then go through your bank statement and balance your finances.

Keep these four things in mind while you’re tracking your budget and I’m sure you’ll have great success.


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