How to stick to your monthly budget

Managing your money and learning how to stick to a budget can be difficult. You may worry because you're not saving enough money.

But by using a monthly spreadsheet you can figure out where your funds are going and get your bank account on track. It takes time and energy, but you’ll better understand where you stand financially and what you need to do to save or cut back.

Throughout the budgeting process, unexpected situations may arise and you may need to take funds from your savings. As long as you get into the habit of saving a little bit each month, you will be able to build up your savings accounts in no time.

Here are some guidelines for creating a monthly budget that will help you meet your expenses and build for the future:

Use the 50/30/20 budgeting method

One sample budget divides your after-tax income into three categories: Needs, wants, and savings and debt repayment.

Needs, which are 50% of your income, should include payouts for housing, food, utilities, transportation, minimum loan and credit card payments, and child care.

If you go over 50%, you’ll need to take funds from the second category, wants, which makes up 30% of your monthly budget. These items will likely include what you spend on entertainment, dining out and travel, but they vary from person to person.

The third category, savings and debt repayment — credit card and loan balances — makes up 20% of your monthly budget. You could use this to create an emergency fund of at least $500, save for your retirement, and have more money for the future.

Credit card payments require cardholders to make monthly minimum payments, and the amount owed on the bill each month can change based on the card's balance. Paying off your balance every month is one way to use a credit card responsibly, as interest accrues on any unpaid portion of your monthly bill, thus increasing your monthly payment. Aim to pay more than the minimum payment to reduce balances quickly.

Other loans, like auto loans and mortgages, typically stay the same from month to month. It's easier to budget for these repayments because you can anticipate their dollar amounts. Staying on track with credit card and other loan payments can help ensure that your credit score remains high and is an important part of sound financial management.

Tips for staying on track

Your monthly budgeting should be user friendly. One option: Use an online budgeting tool to track your budget and create a new monthly spreadsheet.

You might also consider finding a friend or family member to help hold you accountable. Here’s one way this can work: Both of you assemble budgets at roughly the same time and check in with each other regularly to see how you’re faring. The regular contact can serve as a reminder to remain resolute and on course.

You could also consult older members of your family who have done a good job of saving money, even meeting with them periodically. They can point you toward what they did right and the pitfalls to avoid.

Finally, be realistic with your budget. Success may take time. If you allocate too much for savings, you risk spreading your income too thin. That can make it difficult to pay bills and add unnecessary stress to the budgeting process.

Remember that budgeting is a learning process.

As long as you create great habits and stick to them, you’ll take firmer control of your money in a short period of time. Establish a monthly budget and stick to it.