Do you find it hard to make and stick to a budget? You aren’t alone. However, if you break it down into bite-sized chunks, then you’ll discover that it doesn’t have to be challenging at all.

I can almost hear your protests. I can hear them because I feel them stirring inside my own mind. The arguments are familiar to me because I have found it hard to make and stick to a budget in the past. For me, making the budget is usually easy; sticking to it is the hard part. However, as someone with inconsistent income, even making the budget can be hard.

Like I said, it doesn’t have to be. Here are five steps that can simplify for you how to make and stick to a budget. Step one, setting SMART Goals, is where you make the budget. The other four steps will help you stick to it.

1. Make Your Goals SMART

The first step in budgeting your money is figuring out why you want to do this in the first place. Then you can set goals that align with that vision.

Why Do You Want to Budget?

Some of the most common reasons that people want to budget include:

  • Desire to save money towards a specific goal, such as a family vacation
  • Desire to save money more generally for the future, to have a cushion
  • Awareness that spending has gotten out of control, wanting to rein that in
  • A budget can assist you in feeling like you have more control over your finances, so that they aren’t a mystery
  • You and your partner aren’t on the same page about finances but you want to be

Set SMART Goals

Once you know why you want to make and stick to a budget, then you can set very specific goals. Use the SMART method:

Be Specific

You can work on the “S” of smart goals at the same time that you’re working to determine exactly why you want to make and stick to a budget. Answer the “what and why” details. For example:

“I want to make a budget so that I can be free of debt. Why? Because I find debt to be incredibly stressful. If I am able to reduce my spending and use the extra money to reduce my debt, then I will feel freer.”

Alternatively: “I want to budget so that I can save $10000 for a family vacation in Europe in three years. I want our family to have this memorable experience together without the strain of going into debt for it.”

Get as specific as you can to help you really drill down to the meat of the goal.

Make Goals Measurable

Now it’s time to apply numbers to that goal. How much do you want to save? What is a realistic amount to budget for each necessary expense in your life?

For example, “My rent is $1800 so I need to budget that much for rent. I currently spend $1000 per month on food. However, I can budget $600 instead. I will set the other $400 into savings.”

Alternatively: “I want to go on vacation in three years, which is 36 months. If I want $10000 by then, I need to adjust my budget so that I can save $275 per month.”

Is Your Budget Achievable?

This is where you marry your goals and dreams with your realistic financial situation. In other words, this is where you make a budget. You list all of your expenses. Go through your financial history to get a realistic sense of what you spend each month, not just on set items (such as utilities and your phone bill) but also on miscellaneous (such as entertainment and clothing).

Analyze what you spend and what you earn. Look at your budget goals and see if you can make the numbers work out. For example, in the case of the three-years-away vacation described above, can you adjust your budget to save that $275 per month? Most likely, yet. If not, then you might need to tweak your goal. You could plan for a vacation that is four years away or you could reduce the amount you would like to have within three years.

Make sure that you make your budget work on paper. That’s the only way you have a chance of making it work inn real life.

Are Your Goals Relevant?

If your goal isn’t truly in line with your personal values then you’re not likely to make a budget and stick to it. Saving for a family vacation is relevant if you all enjoy traveling and you believe that such experiences are valuable individually and collectively. It’s worth it to you to stick to your budget because you believe in the larger goal it will allow you to accomplish.

If, on the other hand, you don’t actually enjoy traveling but you think you “should” because it’s “good for the kids” then you might self-sabotage your budget without intending too. Go back to the “why” that you looked at earlier and make sure that the answer aligns with all of your loftier ideals in life.

Place Time-Boundaries on Goals

As you set the specifics of your goal, you will want to limit it with time. The aforementioned three years of saving is a good example.

You can set time boundaries even if your budget goals seem looser. For example, “I want to create a budget that will allow me to save money so that I have a cushion for the future.” Make that more specific. How much do you want to have? By when do you want to have it? How can you break down that budget into annual and monthly goals?

For example, “I want to retire at 65 with $500,000 in my savings account. I am 35. That means I need to save $500,000 in 30 years, which is about $16,700 per year or $1388 per month.” This lets you know that you need to set a budget that will allow you to save $1388 within a one- month time frame.

2. Write Out Your Goal and Post It

Use the SMART method to create your budget. If you need additional help with the specifics of analyzing your finances in order to create this budget, here are some helpful links:

Once you have established your budget, write it out. Make it like a mission statement. Couch it in affirmative language. Then post it where you will see it regularly.

You might want to post it in several places. For example, a bullet list of the steps you plan to take makes a great phone screensaver. A paragraph about why you’re budgeting goes well on an index card that you use as a bookmark. Get creative. Where will you see the plan most frequently and how can it most motivate you to action?

3. Review Your Progress Regularly

The visible reminder from step two will help you stick to your budget. However, you should build in additional accountability. Therefore, you should review the goal regularly. Check your progress against the goal. Ask yourself if you need to make any adjustments. (You can always go back through the SMART steps if you do.)

I like to do a weekly quick check-in with my budget. Then I do a bigger review at the end of each month. This helps me stay on track throughout the month. It also helps me plan out the next month in the best way possible. I may discover that I can’t stick to my $600 food budget, so I will rework my budget accordingly in order to still meet my goals.

4. Reward Yourself for Success

Make small goals within the larger goal. Each time that you achieve one, reward yourself. You do not have to spend money to reward yourself. Keep a running list of things that give you great pleasure. When you meet a goal, choose at least one thing from your list and indulge.

This step is especially great for families or couples trying to stick to a budget together. Instead of nagging and annoying each other into compliance with the financial restrictions of a budget, you can use teamwork and encouragement to achieve your shared goals. Celebrating together will build momentum and keep you working towards the goals together.

5. Get Back on the Budget Horse When You Fall Off

Are you the type of person who plans to diet, then the second that you “cheat” you just go into a total binge? Many people do this when it comes to budgeting. You work hard to set the budget goals. You restrict your spending to see the budget. Then something happens and you slip. You over-spend. It feels like you’ll never get back on track, so you stop sticking to the budget altogether. This doesn’t make sense.

With a diet, let’s say that you ate a piece of cake which went over your caloric budget. Does it make sense to then just add a whole bunch more calories on? Will it feel good to your body to quit the diet altogether and eat all of the foods that are worst for you? No. You ate the cake. Enjoy it. Then move on. Get back to the diet. Eat the way you intended starting with the very next meal. Likewise, overspending once doesn’t mean you should keep spending. Go back to the budget. Start with it right away, as soon as you realize that you slipped up. Don’t berate yourself, shame yourself, guilt yourself, or avoid the truth. It’s all okay. Get back up on that budget horse and ride it to your goal.

What is the biggest challenge that you have had when it comes to learning how to make and stick to a budget?