Curtis Financial Planning

How to Stay within Your Budget: Monitor Your Budget Busters

We originally published How to Stay Within Your Budget: Monitor Your Budget Busters on February 20, 2017, and have refreshed it for 2021.

It’s not that difficult to create a budget. What’s hard is sticking with it over time. One way to increase your success is to track what you spend. Unfortunately, very few people have the discipline to track every expense. The good news is that you don’t have to do this to be successful.

Most people don’t overspend on everything. Instead, there are usually a few items—let’s say clothing, dining out, or travel—that bust the budget. Monitoring and controlling these budget busters can help you reduce your spending without tedious bookkeeping.

How to Monitor Your Budget Busters

To stay within your budget, monitor your budget busters. You know what they are. Perhaps you go to your favorite clothing boutique and can’t say no to the latest seasonal fashions. Or you find it impossible to browse a bookstore or Amazon without stocking up on the latest bestsellers.

Indeed, it doesn’t help that online shopping has made it all too easy to spend more money without any effort at all. And the pandemic only exacerbated this trend. In fact, consumers spent $791.70 billion online with U.S. retailers in 2020, up 32.4% from 2019, according to Digital Commerce 360.

Though online spending is up in general, the things we overspend on are as individual as we are. Identifying the culprits is the first step to creating a spending plan that will work for you.

A Simple Process to Stay Within Your Budget

  1. Make a list of your budget busters – you know what they are.
  2. Tackle one at a time, or if you are extra motivated and organized, all at once.
  3. Track your spending by employing the techniques below.

The envelope system involves placing your monthly budgeted amount for each item into an envelope in cash. For example, label the envelopes “clothing cash,” “shoe cash,” and “dinner-out cash,” and stash them in your wallet. When the cash runs out, stop spending until the next month when you will refresh the cash.

You may be thinking, “There’s no way I’m going to carry that much cash around.” And of course, there are those airline miles to accrue! In that case, write down your budget busters in your day planner or on a piece of paper that you post somewhere visible. After each purchase, subtract what you spent from your budget. Stop buying when you reach your limit.

If you gave up your day planner years ago and lose every piece of paper you write on, try booting up your favorite tracking software. For example, PocketGuard and Mint.com let you upload transactions from your credit cards and checking accounts to keep track of your spending. Each month, log in to see if you were able to successfully stay within your budget.

Learning to Spend More Intentionally

Alternatively, you can find a trusted advisor or friend to “buddy up” with and help you stay on track. Accountability is a powerful motivator.

Finally, try monitoring your budget busters instead of every expense for a few months and see how it works for you. I think you’ll find that it’s an excellent behavior modification tool. Moreover, you’ll become increasingly aware of spending habits that aren’t in your best interest. Over time, you’re likely to find it much easier to stay disciplined and reach your financial goals.

Do you want to manage your money (and life!) better?

Download The Happiness Spreadsheet and learn how to align your spending with your values for greater happiness.

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Curtis Financial Planning