

How to Create a Budget—and Stick to It
The following article is part of Resilient America, a series in which people share stories of how they've rebounded from personal financial crisis—and lessons for us all. It is presented by Chase.
Imagine going on a yearlong shopping freeze where you only pay for necessities like food, housing, gas and utilities—and spend zilch on all the extras. No dinners out. No new clothes. No plane tickets. That's one strict way to budget. But that's how Cait Flanders, a writer based in Vancouver, managed to save more than $20,000 in one year.
Flanders lost track of spending and wanted to bulk up her savings quickly. “I'd totally let lifestyle inflation creep in," she recalls, adding, "I was putting savings last when it should have been the first thing that I did when I got paid."
This austerity plan worked for Flanders, but it may not be right for you. Luckily, there are many other road-tested strategies for budgeting. If you're determined to craft a realistic budget—and stick to it—here are some key steps worth following:
1. Stick to spending parameters
Are you spending more than you really should on housing? The recommended budget includes the allocations below. (Note: These percentages are taken from your take-home paycheck, after factoring in items like taxes, your retirement contribution and insurance benefits.)
- Housing (including maintenance, utilities, taxes, etc.): 30 percent.
- Transportation (this takes into account the cost of gas, insurance, and maintenance): 15 percent.
- Food and groceries: ≤ 10 percent.
- Insurance (including health if work doesn't provide it, and other insurance like life): 10 to 15 percent.
- Emergency fund: 10 percent.
- Future savings (e.g. retirement): 10 to 15 percent.
- Debt (including credit cards, student loans, and other loans): 15 percent.
- Miscellaneous (Entertainment, Travel Clothing, etc.): 5 percent.
2. Carefully review your recent spending
Go through your expenses from the last few months and move them into the above categories. See how they add up. This will give you a good sense of how your spending really stacks up. Your budget might look different if you don't have any debt or if you live in a city with a high cost of living, but use this breakdown as a general guideline to help you get started.
3. Establish realistic goals
Does your budget reflect your ambitions? This is crucial. Your budget should serve as a compass for you, as you aim to achieve various goals in the next few years, and many more years down the road. Do you aspire to retire early? If yes, then your retirement account should reflect that. Do you want to finally make that trip to Australia? Then, how are you going to shift your spending to allocate more towards your travel budget?
4. Prioritize savings and debt
Saving money and paying off debt is not as exciting as buying a new car, or eating a meal at your favorite restaurant. But these moves can help you build a solid financial plan and achieve your goals.
Unfortunately, we have the tendency to pay everybody else before we add to our savings account. And by the end of the month when cash is running low, we often end up having only enough to pay the minimums on our credit card. For your budget to work, you want to tackle savings and debt first—and everything else second.
5. Shake up your billing cycle
If your bills come due at or around the same time each month, that can put pressure on your budget. So here's a solution: Spread out your due dates. This can be as simple as calling each account and asking for your billing date to be adjusted to a day that's more convenient for you—such as when your paycheck hits your bank account. Most companies are willing to be flexible, especially with loyal and reliable customers.
6. Consolidate your debt
Part of achieving financial success is staying organized. If your credit card statements are scattered, it helps to get things streamlined so that rather than making multiple payments, you can just have one single payment per month. Look into consolidating multiple debts to a card that offers a 0% introductory APR, like Chase Slate, to make payments simpler and benefit from interest-free payments for the first 15-months. Best to pay off the debt during the introductory period so you can take full advantage of the interest savings.
7. Take your budget to zero
When did you last review your budget If it's been more than a year, you could probably benefit from a reboot. Our lives shift and what we once signed up for, like a gym membership or a wine of the month club, may no longer be what we really need or care about today.
8. Start a side gig
Three out of four Americans claim to live opens overlaypaycheck to paycheck . It makes sense when you think about the fact that wages have remained pretty flat for decades while the cost of living has grown. We're underpaid and over-indebted.
A side gig can help you earn some extra cash and take the stress away from paying bills.
Thanks to the digital revolution, there are a number of easy access ways to get started—and quickly. If you have a few hours or more per week, help neighbors with tasks and errands. If you have something to teach like a foreign language or math, try being an online tutor. Animal lovers can find dog walking and pet-sitting jobs. There are also great websites for scoring gigs related to coding, graphic design and marketing.