How To: Make A Budget (& Stick To It!)


Paco de Leon from last week’s interview has been working in finance for over 10 years. She’s also the co-host of the Refinery 29 Money Diaries podcast, in which she doles out helpful advice every week. So if there’s anyone we should be asking how to stick to a budget, it’s her! This week, she shares her 7 steps on how to make a budget –– and how to stay with it. 

1. Decide you’re serious. Paco says the first step is to decide that your personal finance is important to you. Say to yourself “Okay, I’m going to change”. As they say, the first step to solving a problem is admitting you have one.

2. Set aside time. Choose a day and time to sit down and check in on your finances every week. “Setting aside weekly finance-time is hugely important and can be transformative for people. Be serious about it, mark yourself as busy, and don’t allow yourself to compromise on your finance time.”

3. Look to the past to plan the future. “Look at historical data to project what your budget is going to be.” Paco recommends looking over the last 30 days to get an idea of how you’ve been spending money.

4. Use a tool. Does printing out old credit card statements make you feel anxious? Not to fear! Paco suggests using “An application called Tiller HQ. It’s a budgeting app that scrapes your banking data into Google Sheets and makes it easy to sort into categories and run reports.” 

4. Group your spending habits into categories. Next, group your previous purchases into three categories. “The first is Bills and Life, the second is Fun and BS, and the third is Future Goals.” Go through and see how much you spend in each category, and then decide how much you want to spend on each category moving forward. “Give yourself a [maximum] number and stick to it.”

5. Open separate bank accounts. Paco recommends opening up a checking account for each category to truly keep them separate. “Have a checking account for your Bills and Life, and all of your bills should be paid with that account.” Do the same for Fun and BS. If you’re going to do something fun, “Leave the Bills and Life debit card at home and [then] it’s not even an option to spend money out of that account.” Your Future and Goals should go into your various savings accounts (emergency fund, retirement fund, vacation fund, etc.).

6. Automate your savings, if possible. “If you can automate your savings, do that. But, if you’re [starting out] and you need to manually do these transfers, at least you have weekly finance time where you can sit down and do that.” Make it a goal to work towards automated savings and keep checking in until you get there.

7. Keep it up, and watch what happens. “If you do this method, I promise you your life will change in a way that you didn’t know it could. Once you do all that upfront investment of work, it’s just following the rules that you set for yourself.” Willpower is finite, but actual planning can keep you in check for years to come.

Great advice, Paco! Thank you so much! Readers, after you’re done downloading Tiller HQ and marking weekly finance time in your calendar, come back next week for an interview with one of our favorite Bon Appetit Magazine YouTube stars. (Photo provided by Paco de Leon)