How to make and stick to a budget

by | Aug 5, 2019 | Life, Self Care

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Budgeting can be easy once you know what you are doing and have it all set up. The first few weeks or months are the hardest as you learn how to do it and get your money sorted. After that, most of it can be automatic!

Here’s how to make and stick to a budget.


What do you do first?

Before you get into creating a budget, you need to know your income and expenses. Either spend a little time writing them all down or go over your bank statements to see where your money goes. List out all your expenses including rent/mortgage, rego, car maintenance, house repairs, savings, holidays, phone bills, water, gas, electricity, insurance, school expenses, birthdays, Christmas etc. There is a lot we spend money on.

With each section look at how much you are spending and be realistic. Too often people write out their budget but set amounts well below what they actually spend then the budget doesn’t work and they give up. When you can see how much you are spending and on what, you can create your budget.

How do you create a budget?

A budget is basically a list telling you what you are spending and where your money needs to go. It is a way of making sure you don’t overspend but doesn’t need to be complicated. How you create your budget is up to you. Here are a few options.

1. Percentages

This is my preferred method because it is set and forget. I have done it this way for years and you might have heard about it more recently in The Barefoot Investor. Essentially, you want to live on less than 60% of your income for daily living expenses e.g. rent, bills, petrol, insurance etc. All those things you need just to live. Then put 10% into savings, 10% give to charity, 10% on whatever you want (splurge or sanity money) and invest 10%.

When you first start doing it you probably won’t be able to do the percentages at these amounts. Sometimes it might look more like 80% is daily living and only 5% to the others. That’s ok. Keep working at it and improving your income as well as reducing your expenses until you are well within 60%. I know many people who aim for 50% or lower so they can save and invest more.

By using percentages, any money that comes into my account is split between 5 accounts and most of it is automated. Direct debits are set up for my daily expenses account, my investing 10% goes out to that account and I don’t have to think about it all.


2. Apps

Tracking your budget on apps can make things easy because most of us have our phones on us all the time. Create your categories on whichever app you choose then be sure to log all your spending and what it was on. Some apps connect to your bank account so it can automatically track those transactions. For many people, it is the small cash amounts that break the budget.


3. Spreadsheets

If you like spreadsheets you can create a budget one. List out your expenses, how much everything is and your income. Set it so you can easily see where your money is going and which areas you need to work on. 


4. Cash Envelopes

Dave Ramsey made this method famous. You have a separate envelope for each area of your budget e.g. groceries, petrol, bills. Each week you take out the cash for each section of the budget and put it in the envelope. When the cash is gone, you have no more money for that area and have to make do. Or if you borrow from other envelopes, you will have to repay it the following week. This method has helped lots of people get out of debt. how to make and stick to a budget


How do you track your budget?

Personally, I simply check my accounts every day and can see where my money is going. Since it is automated, I tend not to think about it much.

You can use apps or spreadsheets as mentioned. The important thing with tracking your budget and spending is to actually do it. If you don’t track your spending, how can you possibly know where to cut back or what is eating a hole in your budget?

As you get used to tracking it, it will become second nature, you will understand more about your money, where it is going and how to make more. One of the biggest causes of divorce is financial issues. Budgeting and being open with your spouse about your finances will give you so much peace of mind. Tracking it ensures you can both see where the money is going and where you are financially.


How do you stick to your budget?

So you’ve created the budget but how do you stick to it? For most, this is harder than writing it all out. Spending less than you earn and sticking to the budget every day is hard at first. It gets easier though, I promise!

1. Remove temptation

Do you love to go to the shops with your friends? You still could, provided you leave the cards and cash at home or only take a limited amount with you. Alternatively, find other things to do such as go to the park, gym, beach, go swimming, explore your local area etc. Create a list of things you could do together other than shopping.

Get rid of Afterpay, ZipPay, ZipMoney and all of those temptations. Leave your cards at home. Remove the information on Google so it isn’t just one click to shop with your card. Do what you can to actively reduce the ways in which you will be tempted to spend. 


2. Reward yourself

In the budgets above I mentioned 10% is yours, as splurge or sanity money. Having this money to do whatever you want with helps a lot. We all accidentally blow the budget at times. This amount helps reduce the number of times it happens. You can spend it on whatever you want, save it for weeks to get something bigger or whatever works for you. It’s yours!

3. Practice delayed gratification

I see your eyes rolling! It’s not all bad. I use a 30 day list. Anything I see that I want goes on the list and after 30 days, if I still want it, it can be worked into my budget. I can’t buy it right away but I can budget and plan for it.

“Oh, but what about the sales and clearance items?” I hear you say…

Do you really need it? It’s not a saving if you spent money you didn’t have. That $2 top in Target, those $5 platters, $4 book, whatever it is, you probably don’t need it and it adds up. Spending $50 here, $20 there and $40 at another place on clearance or sales items means you spent $110 on stuff! It is easy to do and to think you are saving but you’re not. how to make and stick to a budget

4. Cut back

Go over every expense you have and look at ways to cut back. I have a free 21 day money challenge which helps you make and save money in every area of the budget. Compare insurers online and you can save thousands. Look at refinancing and potentially save $3,900! According to research by mortgage brokers, that is the average amount an Aussie family saves when they refinance.

As you cut back, throw that extra money onto any debt, into savings, on your mortgage or invest it to make your financial future brighter. 


5. Have a goal

I love to travel, as do my daughters. Fortunately, we now get paid to travel but we have used travel as our main fun goal to keep finances in order. Our other main goal has been full custody which was expensive. Maybe yours is buying a house, taking the family on a holiday or getting a new car. Whatever the goal is, make sure everyone knows it, wants it and works together for it. 
 how to make and stick to a budget




Budgeting doesn’t have to be difficult or take too long. It is simply a matter of tracking how you live within your means and telling your money where to go instead of being stressed about it all the time.


About Kylie Travers Kylie Travers make and stick to a budgetKylie Travers went from homeless single mother to multiple international award-winning CEO, author, speaker and ambassador. She owns, one of Australia’s top sites about ways to make and save money. Originally from Australia, Kylie and her daughters, aged 10 and 11, travel full time while Kylie writes about money, travel and life.

You can find Kylie at The Thrifty Issue on Instagram and Facebook







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