Several activities help individuals create budgets they can stick to, including tracking spending, considering yearly expenses and including some money for entertainment. Personal finance expert Dave Ramsey also recommends creating budgets with a spouse or partner if finances are shared so that both individuals are on the same page.
Computer software, online budget trackers and smartphone apps all provide easy ways to track spending. Checking the tracker at least once a week shows consumers where their money goes. New budgeters often are surprised to learn just how much they spend on disposable items, such as restaurant meals or clothing.
While most budgets are created on a monthly basis, it's also important to consider annual expenses because they can skew an individual month. Breaking up major annual expenses like Christmas gifts, birthday parties, vacations and summer camps into monthly allotments makes it easier to handle these large bills when they're due.
Even when the budget is tight, Ramsey recommends allocating some money for entertainment expenses, such as movies or hobby-related purchases. Allowing for small indulgences often makes it easier for budgeters to stay on track. Ramsey notes that most consumers need at least three or four months to perfect the budgeting process.