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How to Finally Make Your Budget Stick: Two Shortcuts That Work

Pop quiz: Do you know how much you spent on eating out last month—to the penny?

I don’t.

Does that surprise you?

After all, I publish a financial blog. Shouldn’t I join the chorus of financial pundits singing: “Thou must create a budget and track your spending to the penny! Thou must create a budget and track your spending to the penny!”

I mean, I could. But here’s the problem: If you’re like me, you’re not going to do it!

(At least the tracking part.)

You might start out strong and track all of your spending this week. You might even finish your budget for the month. But next month—or the month after that—life will get in the way. Perhaps you’ll withdraw $60 from an ATM on Saturday night, forgetting to write down how much went for the cab, how much for drinks, and how much is left in the pocket of your jeans.

You’re not lazy. You’re just human. And you’ve got better things to do than manually write down your purchases all the time.

I know this because I gave up trying to track my spending to the penny years ago after many failed attempts.

That’s not to say, however, I don’t have budget.

I do. It’s just a casual budget.

Because I’ve found that the simpler you keep budgeting, the more likely you are to do it.

Here, I’ll share with you:

  • How I’ve boiled budgeting down to TWO EASY STEPS that don’t take much time.
  • How you can control your budget without recording every penny spent.
  • How you’ll be able to manage your budget when it’s convenient for you, not every month or every week.


My wife Lauren and I have a simple spreadsheet similar to my free budgeting spreadsheets that lists our monthly after-tax income, our recurring monthly expenses like the mortgage and utilities, desired monthly savings, and estimated amounts for everything else like food, entertainment, and household expenses. Because we’ve got our finances in check, all our estimated expenses come in way below what we earn, so if we want to spend a few extra hundred dollars here or there, we don’t have to sweat it.

Now, we’re fortunate to be in this comfort zone today—but believe me it hasn’t always been this way. I used to have to watch my bottom line far more closely. Still, no matter how I tried to track my monthly spending, my budget was never perfect.

What I’ve learned is that I’d rather have a rough budget with a big cushion for unknowns than budget to the penny but leave no room for the unexpected.


Consider the following big picture budgets.

An example of a healthy monthly budget.

The first example shows a healthy budget. After taxes, the person is saving 25% and after big expenses like housing and transportation, has plenty to spend on whatever he or she pleases.

An unhealthy monthly budget rip with debt payments and little cash left over for anything else.

In the second example, debt payments on credit cards or student loans leaves little left over to spend on anything else. This kind of budget creates the kind of debt death spiral I sketched in Kick Debt’s Ass. You have to pay so much each month to creditors, you don’t have any money left over, so you have to use credit to buy stuff you need.

*If your budget looks like this, you need to dramatically reduce your big expenses (like housing and transportation), earn more money, or simultaneously restructure your debt AND stop using credit.

Budget shortcut #1: Sketch your own “big picture” budget to know how much “play money” you have left over every month.

(I call it “play” money, but it may still cover necessities like food, it’s just money that isn’t earmarked for a fixed monthly bill—in other words, what you have left to spend).

Once you know that figure, reduce it my 20 percent or so to account for expenses that may come up less than once a month like car maintenance, insurance premiums, and certain taxes. (It’s easy to forget about or at least underestimate these.)


Of course, making a spending plan is only half of budget. You need to know whether your actual spending is within or exceeding your plan.

You already know that I’m not a fan of manually tracking expenses to the penny.

So what’s the answer?

Simple budgeting step #2: Estimate or automate expense tracking, and occasionally ensure you’re on track.

If you pay for things mostly with cash, you’ll just have to estimate. Use your bank statements to add up how much cash you withdrew each month—right there you should know whether or not you exceed the “play money” in your budget.

If you pay for most things with a credit or debit card, you can use a free budget tracking tool like or simply use your card statements to get an accurate account of your spending. I simply import (or cut/paste) transactions into excel and add a column to categories purchases however I want, like so:

It's easy to download credit card statements to Excel and assign categories

Then I can run a pivot table to quickly show me how much I spent in each category:

You can create an Excel Pivot Table that will calculate how much you spent by category.

Technical Note: To create a pivot table like the one shown below in Excel 2007 or 2010, highlight the columns of data, click Insert -> PivotTable -> PivotTable and OK. Then, in the PivotTable Field List, drag “Category” to RowLabels and “Sum of Amount” to Values.


Obviously, taking shortcuts in your methods can result in compromised results.

On one hand, some rough, occasional budgeting is better than no budgeting at all. On the other, your estimates may be wrong. One solution: the more transactions you track automatically with a free budgeting tool, the smaller your room for error.

With that disclaimer, I can’t imagine budgeting any other way, and I can’t imagining recommending YOU budget any other way, because I KNOW how impossible it is to keep up with a detailed manual budget. So give these shortcuts a try, and let me know how it works out for you.

What budgeting shortcuts do you use to plan and track your spending in as little time possible? Let everyone know in a comment.


Published or updated on May 4, 2011

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


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  1. Thanks for the post. Really like the rough budget approach. It’s simple.

    There are two measures I like to focus on – surplus income and net worth. I track theses carefully every 6 months using a basic financial statements spreadsheet. Better budgets mean higher surplus income, and this means better growth opportunities.


  2. Kylie says:

    This may be a more tedious method but it worked for me. I started my budget by categorizing my spending habits (groceries, food out, clothing, gas, toiletries, misc., bills) like the budget you showed. Once you get enough valid data (a month may do it for you but I used a longer period so I could account for random plane tickets home, big order of contacts, etc. that aren’t regular monthly purchases), you average it out and see how much you spend in a month within each category. By doing this I was able to see exactly how much excess I spend out take out and fast food and give myself a realistic number.

    The next step was to look at miscellaneous and other categories that may have things that aren’t necessities and see what you truly needed (plane ticket home, oil change, etc) and separate that from what you don’t really need (impluse buys- walking down the cosmetic aisle for mascara and then seeing some expensive eye shadow with a nice big advertisement I don’t need at all but impulsively buy). Once you separate those things you can see what you absolutely need in life on average. Then you add on your appropriate amount of “fun/misc.” and you have an accurate budget. I think this is a good method way to capture absolute needs you tend to forget when you list “Bills and Food” as your necessity expenses. What we all “absolutely” need varies and when you don’t take that into account, you end up budgeting incorrectly.

    For instance, most people wouldn’t consider detergent, toothpaste, soap, toilet paper, etc. monthly bills but that is essentially what they are. They are things you must pay for monthly (weekly, bimonthly, etc.). For me, an absolute necessity is my face lotion. It’s a regular bill for me that I won’t skimp on therefore I include it within my budget.

    It took a good bit of sit down time one evening but the result was worth it and just by doing it once, I don’t have to worry later.

    Now all I have to do is place purchases in the category in excel and it adds up the total and I can see if I’m over, under, or on track at any point during the month.

    I’ve also found that it has really helped curb those impulse buys because you’re more self aware. When I go into the store for toiletries, I’m fully aware of what I truly need and what I don’t. I helps me consider whether or not I truly need that item. I know that if I buy something completley unnecessary, I may go over budget and choose to pass on the item.

    The sounds like a good option. Personally, it takes literally a second to look at my bank account and type “Krogers | $80.59” so I just track myself.

    I think it’s important to track categories because people tend to overspend in categories and not even know it. You may be great at spending just the right amount at the grocery store. But your overspending habits with fast food might be outrageous and you don’t even know it.

  3. I spent a month writing down every thing I spent money on before I even created a budget. That way I knew where I was coming from (pretty eye opening experience). Then I created a realistic budget based on that and used to figure out where I could cut some expense and could save more.

  4. I do keep a detailed budget, but we have to. However, there is a big difference between tracking spending and budgeting. I know you spent $300 in groceries in 10 days but what does that mean? Is that two weeks worth of food is that 3 weeks worth of food. Was Whole Foods having a sale on organic apple juice and you stocked up for six months?

    I feel that people really miss out on so much knowledge regarding their finances, because they are tracking and not budgeting. Budgeting means that you know how much it is going to take to feed your family all year. It might be $650 a month, but your spending limit is say $850 a month. Thus, if you took a huge income hit. You would know the exact amounts that you need. Like diapers…you cannot cut diapers from the budget.

    Thus, if you think in these terms, you have to account for the insurance premium, the oil changes, the dry cleaning bills, and the car repairs. The other option to make budgeting easier on a monthly basis is making fewer purchases. If you to the grocery store 6 times a month, it really is not that difficult to track grocery spending to a budget.

    Just my thoughts…

  5. Justin says:

    My wife and I follow the same kind of casual budget you do. We have savings and retirement money automatically pulled from our paychecks, along with debt repayments.

    For food and entertainment, we take out a certain amount of cash each paycheck. Once that’s gone, we’re eating what we have left in the house. If we have money leftover, it goes into a little rainy day fund.

    But tracking every single expense is a pain.

  6. Patrick says:

    I’ve found that the biggest budget buster is those ‘random’ purchases that you think are going to just be one-time (i.e., car repair) and won’t be back again next month, which means you’ll then be able to save that amount. However, there’s ALWAYS going to be something random to throw off your budget so I just go ahead and budget for ‘random’ in my calculations….and if nothing comes up, then that goes to ‘fun’ or my savings.

  7. Brian says:

    I don’t categorize my spending at all. I’ve just never been that interested to do it.

    I simply pay all the necessary bills (house, electric, etc.) at the beginning of the month and direct the savings/investment amounts at the middle of the month (paid twice monthly). Anything left is available.

    I do charge nearly everything and keep a running tab of my CC balance, so I know how much I’ll need to pay it off when the bill becomes due.

  8. I started tracking all of my spending a few months ago and have actually found it pretty easy to do so. I just use an app on the iphone to track my spending. I always have my phone with me and it is really easy to take 30 seconds and add the expense to my phone. At the end of the month, I just export all of my transactions to excel. Now that I know where my money is going, I am going to try and create a budget and stick to it.

  9. Jimmy says:

    With gas prices really rising again ($4.59 by me now), I honed in on budgeting my gas purchases for the past few months. For people that have to travel alot for work, this can really take a toll on expenses. Something that has worked for me is drastically changing how I drive. I tracked my normal 40 min commute for work (5 days a week) for the past 3 months, paying on average $4.11 per gallon. From the first month of my tracking to now, I’ve saved almost $300 more than I was when I wasn’t paying attention to how a drive. I now almost ALWAYS use cruise control, never go more than 5 mph over a speed limit, and have raised my MPG on my Jeep from 23 to 32 (I never thought it could even get that kind of mileage). Yes, this means you need to change your daily habits to make sure you leave on time (since speeding guzzles more gas). Instead of filling up once every 3 days, I’m filling the tank once every six. This can be applied to any type of vehicle. For budgeting, it’s something that most people don’t think of for indirectly saving cash. Driving smarter and more efficient (no more speeding, cruise control whenever possible, easy on breaking hard, etc) can help you save gas money more than you may imagine. It’s really helped me out!

  10. MMS says:

    I’ve found the easiest way for me is to have 2 checking accounts, one for bills and one for my fun money- my employer automatically splits my checks between the two accounts. When the money in the fun money account runs out then that’s it until the next check. I never have to worry about accidentally spending bill money. Also, most of my bills are on auto pay so each month I just go down my budget check sheet and check off each bill as it gets paid.

  11. The unhealthy budget is indeed unhealthy…but not much you can do about student loan debt etc. Unfortunatley, this type of debt is very much an issue these days, and does consume a large portion of low income budgets. The economy and payscale is simply not keeping up with the debt that 20 somethings are carrying after they earn their degree.

    I also don’t like tracking to the penny, but estimation can leave your budget far from accurate. Forget the dry cleaning bill a couple times, maybe that new pair of shoes you bought, and all of a sudden you went over your budget by $100. I hate following it meticulously, but sometimes it’s a necessity.

  12. Echo says:

    We had a few changes in our lives that got us to create and stick with a budget. It started when we found out my wife was pregnant and we wanted to keep a closer eye on our finances. Now that we have become a single income family I find a budget necessary to keep us on track. I don’t just have a monthly budget like most people however, I have created my own yearly forecast of income and expenses which allows us to plan for all of those items that can easily get overlooked throughout the year.

    Where I’ve loosened up is that we each take out some miscellaneous cash that we can spend on whatever we want, no questions asked.

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