How to Create a Budget and Actually Stick to It
Have you ever set a budget only to abandon it after a few weeks? If that sounds familiar, it's more common than you think. Most of us start with good intentions but quickly find ourselves frustrated, making the same financial mistakes, and feeling like budgeting just doesn’t work for us. Or maybe you find budgeting so overwhelming that you haven’t even tried!
The key here is to shift your mindset and see that a budget doesn’t need to be complicated, and is not about restricting yourself—it’s about empowering yourself. It’s about giving your money a purpose and ensuring that you’re the one in control, not your bills or expenses. Whether you’re managing your household finances or running a small business, mastering budgeting is one of the most valuable skills you can develop.
Why a Budget is a Game-Changer
A budget is more than just numbers on a spreadsheet (or a paper for my analog friends); it’s a plan that aligns your money with your goals. Without a budget, it’s easy to spend aimlessly and wonder where your money went. With a budget, every dollar (or whatever currency you manage) has a job, whether it’s covering expenses, growing your savings, or investing in your business. Here’s why having a budget is essential:
⭐️ Financial Clarity: No more guessing if you can afford something—you’ll know.
⭐️ Reduced Stress: Knowing where your money is going brings peace of mind.
⭐️ Freedom to Spend Guilt-Free: Yes, budgeting allows you to enjoy your money without regret!
⭐️ Business Stability: If you’re an entrepreneur, budgeting ensures your business is profitable, sustainable, and growing in the right direction.
How to Create a Budget Step-by-Step
Starting a budget doesn’t have to be overwhelming. Here’s a simple way to build a budget that grows with you:
1. Start Small
If you’ve never budgeted before, don’t aim for perfection. Begin by tracking your expenses for a month. Awareness is the first step to change. Write down everything—yes, even that coffee run!
💼 If you own a business, keep personal and business expenses separate! You can start with one or track both, but on different pages.
2. Identify Your Income & Expenses
List all your income sources—salary, side hustles, business revenue. Then list your expenses: fixed costs (rent, utilities, subscriptions) and variable costs (groceries, entertainment, supplies).
💼 In business, this means tracking operating costs, marketing, and unexpected expenses.
3. Set Priorities & Goals
Decide what’s non-negotiable and what’s flexible. Your budget should reflect your real needs and goals—saving for a home, saving for your yearly vacation, paying off debt, investing in your business and/or your future, or creating an emergency fund.
💼 For business owners, this includes planning for taxes, reinvestment, and cash flow management.
4. Allocate & Adjust
Divide your available income into expenses, savings, and/or investing categories and assign a limit to each. If your expenses exceed your income, adjust accordingly—cut unnecessary costs or find ways to increase your earnings.
💼 For business owners, look at areas where expenses can be optimized without sacrificing quality and keep working on increasing revenue.
5. Keep It Flexible & Review Often
A budget is not set in stone—it evolves as your life and/or business grow. Check in weekly or monthly and adapt as needed. Once you're used to it, you can even do it quarterly or however often serves you better.
Why We Fail to Stick to a Budget
(And How to Fix It 🛠️)
Creating a budget is one thing; sticking to it is another. Here are the most common mistakes and how to overcome them:
1. Setting Unrealistic Expectations
We often go all in, cutting expenses too aggressively, making the budget impossible to follow.
🛠️Fix: Start with small, manageable changes and increase gradually. Your first budget might not be perfect or your final goal, and that’s okay! Implement it, learn from it, and improve as you go. When you're learning to walk, taking one tiny step at a time leads to more success than attempting a huge jump.
2. Not Tracking Your Spending
If you don’t track where your money is going, it’s easy to fall off track. Awareness is key to plan a budget that makes sense.
🛠️Fix: Use a budgeting app, a simple spreadsheet, or even pen and paper—whatever helps you stay aware and ensures that you can commit to it with ease.
3. Forgetting to Budget for Fun & Unexpected Expenses
Strict budgets that leave no room for fun or emergencies often fail. It is important to have buffers.
🛠️Fix: Include a ‘fun money’ category that gives you some flexibility for “wants” and an emergency buffer to ensure you don’t break the bank (or the budget) on an unexpected event.
4. Letting One Slip-Up Derail You
Missed your budget one month? Or even two? That doesn’t mean you’ve failed!
🛠️Fix: Treat budgeting like a learning process—adjust and move forward. Not even the team that wins the championship has won all the games, right?
5. Losing Motivation & Falling into the “I Can’t Budget” Mindset
Each time we set a budget and fail, our brain stores it as proof that budgeting isn’t for us, making it even more difficult next time.
🛠️Fix: Start small, celebrate small wins, and build positive momentum. Because that will cause the opposite effect. Your brain will feel the "satisfaction," making it more inclined to act the same way next time. 💪🏻
Bonus Tips to Stay on Track
🌀 Don't overcomplicate it: If you create 200 categories or create a super detailed document it will feel overwhelming to fill, check and analyze. Start simple and add more details as you get confident!
✉️ Use the Envelope System: Assign cash to spending categories to avoid overspending. Or in modern days, have different cards with limited money.
🤖 Automate Savings & Payments: Set up auto-transfers to savings and bill payments. Lots of manual processes have higher chances of being abandoned!
👥 Buddy Up: Couples can create a budget and review it together. If the budget is just for you, find a friend or business partner to stay accountable—no need to share details, just follow up and motivate each other on accomplishments.
🏷️ Reframe Budgeting as a Tool for Freedom, Not Restriction: You’re not limiting yourself—you’re taking charge of your money! Write this on a post-it note and stick it in your credit card, your computer screen, your wallet... or the place you'll see before spending (or over spending) money.
The Bottom Line
Budgeting isn’t about deprivation—it’s about designing a financial life that supports your goals, whether personal or business-related. The key is to start small, stay flexible, and keep building. Your brain will adapt, and soon, budgeting will feel like second nature.
Ready to take control of your finances? Start with a simple budget today! If you don't know how to start, use this simple template and see how it goes! For more tips and free templates, follow me on Instagram and subscribe below ⤵️ to stay in the loop!
If you have any questions or would like to share your thoughts on this post, feel free to contact me at coach@martafores.com.
