How do I set up a budget and actually stick to it?
Write down everything you’ve spent for the last three months. Or start writing it all down now for the next three months. You can use paper and pencil or a spreadsheet. Then you will know where all your money is going. You should record it down to the dollar. Once you’ve done that you can actually plan a budget and set some goals. Sticking to a budget means meeting your goals, so without a goal, it’s hard. Your goals may be to save x dollars a month, pay down debt, build an emergency fund, etc. Whatever they are, keep an eye on that prize for motivation. You’ll have a sense of satisfaction once you hit one goal and hopefully that will motivate you to hit the next goal.
Most people think a budget is a rigid thing you make once and then have to stick to. That really doesn’t work because life is crazy and things change all the time. I always recommend making a budget in a “zero-based budgeting” app. These are basically the digital version of cash envelopes. They do all the math for you and help you divide up the dollars you own into different categories. It’s ok if you don’t get the categories right when you start. You can add new ones and delete old ones at any time. When you get a paycheck you divide that up too. Over time you learn to spend based on the money you have in each category instead of looking at your bank balance and guessing.
Write it all down. Look at old bank statements to get a better idea of what you spend in each category. Cash envelopes help people stick to the budget. I have multiple bank accounts: groceries, bills, fun money. If the money is not there, I can’t go over budget. I’m also tracking how much I’m earning in interest daily on my emergency fund/savings for extra motivation.
You just need to try, and try again, adjust and try again. It is not just writing it all out once and sticking to it all year or forever.
You don’t have to do everything all at once. As others have suggested, start writing down what you buy. Keep track of this in a spreadsheet to figure out your expenditures, including fixed costs. The more months of information you have, the more informed you will be on what places you could save money in.
In the end, it’s up to you to figure out how much you want to save and where to cut costs, but once you get a baseline you will be in a good spot to make changes.
It took me years of fussing with my budget, how I plan, and my spreadsheet to figure out my current system. You just gotta start so you can start tweaking it to your liking!
All the advice here is good. I eventually settled on budgeting for all the fixed expenses—housing, utilities, insurance, monthly savings, etc.—then set a weekly amount that encompasses grocery, gas, daily expenses, clothing, etc., and when it’s gone it’s gone. Knowing that I’m basically wasting our grocery money if I buy an item of clothing or go out to eat stops a lot of spending. But there have been weeks when we did not grocery shop!