Easy Tips to Help You Stay on a Budget in 2021

Make this year the year you start saving money!
Image of girl on phone doing online banking as example of easy tips to help you stay on a budget this year

Happy 2021, friends! I thought I’d kick off the new year with a much-requested post including all of my easy tips to help you stay on a budget and start *saving money*.

Truth be told, I find it kind of odd that I’m writing about budgeting.

I’ve historically been horrible at budgeting. Any dollar that went into my hands was basically immediately spent on shoes, dresses, or travels. This went on for years… until I had a wakeup call in January 2019.

I had plans to go to Napa Valley for a weekend in February with my dear friend Taylor. Everything was in place for our trip. I was working with a few hotel, airfare, and winery partners to reduce costs – all in, our luxurious long weekend would only wind up costing us about $200 each. Before sending the final confirmations, I took a look at my bank account.

Overdraft fee alert.

Panicked, I looked at my credit cards. If I didn’t spend a single dollar the rest of the month, I would be able to pay off my credit cards… but barely. I couldn’t believe I had gotten myself into this financial situation. Near tears and horrified with myself, I called Taylor to cancel our trip – I couldn’t justify going into credit card debt, especially not for a weekend of fun. Thankfully, Taylor understood. But I felt ashamed and I decided then and there to never get myself in that situation ever again.

So I started budgeting.

Fast forward to today. In 2020, I put 20% of my income into my savings… in addition to contributing 8% of my income to my 401(k). I still managed to go on fabulous trips (before an international pandemic hit), furnish my home, and live my life.

So how did I do it?

3 easy tips to help you stay on a budget graphic

How I Learned to Stay on a Budget

In the interest of being organized, I broke this lesson into 3 parts / easy tips, which reflect the 3-step process I used to learn how to stay on a budget:

  1. Figure out what you’re working with – this is the math.
  2. Set goals and challenges for yourself – this is where you feel accomplished!
  3. Space out your major purchases – this is the reward!

Now let’s dive in.


Easy Tips to Help You Stay on a Budget: Figure Out What You’re Working With

Step 1: Break your monthly expenses down into fixed and variable expenses.

Quick accounting lesson:

A fixed expense is a set amount that you have to pay every month. Think rent or mortgage, insurance, student loans, cable and internet bills, etc. You may be able to negotiate these from time to time, but they tend to be predictable and stagnant throughout the year.

Variable expense are ones that are subject to change. Examples include electricity, water, gas, food, shopping, and other discretionary purchases. We’ll get back to these in a bit.

When I started learning how to stay on a budget, I began by writing down all of my fixed costs. Those costs included my mortgage payments, my internet bill, home security, gym, Netflix, Amazon Audible / Prime / Unlimited, and insurance (and more).

Step 2: Figure out what’s left after subtracting fixed costs each month.

For the items that are billed annually (Amazon Prime, Dropbox, property taxes, etc), I just divided that number by 12 to figure out what it would cost on a monthly basis… and added those to the fixed costs pile.

I added all of those fixed expenses up, and then subtracted that amount from my take-home pay each month (the amount I brought home per pay period, after taxes, health insurance, and 401(k) contributions). Consider the amount leftover your “living money” (just because I like to name things).

Math not your fort̩? It looks a little like this Рjust plug in your own numbers:

Math graphic to figure out how much you have leftover for variable costs each month

Step 3: Determine which variable expenses are required… and which are discretionary.

When I say “required,” I mean electricity bills. Gas for my car. Water bills. Health-related costs. Personal care costs I deemed “required” (like my hair). The monthly cost of my groceries (note how I did not say ordering in or dining out). These are the expenses without which I literally could not live or [get to] work.

I figured out the averages for each of these (for instance, as a single person who occasionally cooked for friends, I typically bought about $350 in groceries each month if I ate 100% of my meals at home), and then I subtracted those amounts from my “living money” (derived in step 2). The amount leftover was my “fun money,” as shown below.

Math graphic so you can figure out your "fun money" each month

When I first started budgeting, I lived two months without touching the “fun money”. I didn’t travel or go shopping. I didn’t dine out (read this post to learn how much I saved by not dining out – it will shock you!). When I saw friends, we either had dinner or drinks at home or went for a walk together (yay free!).

Those first few months, I cut my expenses (and my life in general) down to basics. And, in the course of just two months, I managed to save several thousand dollars by living without my discretionary spending. I realized what I could totally live without (a personal trainer, excessive shopping), and what I couldn’t (not traveling at all quickly impacted my mental and emotional health, as I talked about here).

This time taught me how to prioritize my discretionary expenses. It taught me that I really could stay on a budget… and – moreover – that I would enjoy staying on a budget.

So, as I started adding more discretionary spending back into my life, I decided to ride the high I got from saving by setting up challenges for myself.


Easy Tips to Help You Stay on a Budget: Set Goals and Challenges for Yourself

Of all of my tips to help you stay on a budget, this one was my favorite to implement in my own life. Mostly because I love a good challenge. Yep, fun fact about me: I’ll randomly decide to go a month without ordering in delivery food, or without shopping online, or without buying anything on Amazon (doing that last one right now!). Just for fun.

I know, I’m weird.

If you follow me on Instagram, you might’ve seen that I started using Streaks to track my monthly challenges (click here to see it in the Apple Store, click here if you have an Android). I love this app because it makes forming habits and keeping track of your goals fun and easy.

When I first started budgeting, I would set a different goal each month (in the hopes of a few of them sticking around as habits). Some of my favorites were going a month without:

  • Dining out at restaurants
  • Ordering delivery food or getting takeout
  • Online shopping
  • Any shopping at all
  • Discretionary spending on weekdays for a month

You get the picture. Basically: I set a challenge for myself each month.

And, if I achieved my goal, I gave myself a little reward at the end of the month.

That reward would be something relatively small, but it would satisfy some craving I had.

For instance, if I had gone the entire month without dining out or ordering in / doing takeout, I might order my favvvv Pho Crimson via DoorDash. Or, if I hadn’t shopped at all, I could allow myself to pull the trigger on something I had had my eye on for several months (like my gorgeous art in the dining room!).

The key is to not go hogwild after the challenge is over and you get your reward. Just because you went a month without shopping, that’s not a reason to go drop $10,000 as soon as the month is over.

Which brings me to the last of my easy tips to help you stay on a budget:


Easy Tips to Help You Stay on a Budget: Space Out Your Major Purchases

For background, I bought my house in April 2018… so I was learning how to stay on a budget while I was furnishing my home. Hence why – about 2.5 years after buying my house – I still don’t think of my home as fully furnished (though it is finally close!).

So how did I furnish my home while staying on a budget? I spaced out my major purchases!

Calendar of Q1 2021 to show how to space out major purchases

Given my income levels and how I choose to save, I allow myself one purchase costing over $2000 per quarter. That might be spent on a designer item or on clothes, as it was in Q4 of 2019. In Q1 of 2020, my major purchase was my denim couch, which cost $4,100. I didn’t make any major purchase in Q2 or Q3 of 2020… and then I bought my pink chaise ($1,000) and my new barstools and counter stools (totaling $1,275) in Q4. I bought myself smaller items throughout the year, but I really spaced out the major purchases.

And – by the way – travels totally count as a major purchase! After I started budgeting, my first major purchase was my birthday trip to Buenos Aires in Q2 of 2019 (blog post is going to come eventually, I promise!).

In addition to my quarterly major purchases, I currently allow myself roughly $1,000 per month in discretionary spending.

Some months, that’s entirely spent on ordering delivery food or takeout. Some months, I spend it on shopping, home furnishings, or personal care. And there are definitely a few months in which I don’t end up even touching it at all!

My biggest lesson when I started budgeting was that just because the money is there doesn’t mean I need to spend it. Just because I want something, doesn’t mean I need to buy it.

So how do you cut down on impulse purchases?

I used to be the queen of saying “well it’s on sale… so it’s like I’m saving money!” And then I would use that as an excuse to buy things that, at the end of the day, I didn’t actually want! Now, instead, I force myself to wait to pull the trigger.

When I see something I want, I take a screenshot of it. And then I wait. If after one week (which isn’t that long by the way!), I still really wait to buy the item, then I get it. Sometimes, the item sells out before I get a chance to buy it. Sometimes, it’s still in stock and it’s suddenly on sale (a major win in my book!). And, sometimes, I realize I want it but I can totally wait to buy it, so I wait until it’s on sale next (as I did with my Dyson Airwrap).

After nearly 2 years of using the screenshot-and-wait-a-week method, I re-wear items more. More of my closet is now made up of items that are better made and/or ethically made. I rarely – if ever – buy items that I see on Instagram and love on somebody else but at the end of the day aren’t *me*. My style is more consistent and I finally actually love every piece in my wardrobe. I feel more confident in what I choose to wear and I no longer worry about money.

What are your favorite easy tips to stay on a budget? Do you use any of the tactics I listed above? Let me know in the comments below!


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