This Is Dave Ramsey's 'Secret to Staying on Top of Your Budget.' Is He Right?

If you've ever struggled to stick to your budget, you should read this Dave Ramsey advice.

Budgeting isn't most people's favorite part of money management. But, it's a necessary part if you want to make the best use of your money. Creating a budget not only helps you avoid credit card debt and save enough money for a secure future, but it also enables you to enjoy your money more since you can spend guilt free as long as you budget for it.

Unfortunately, making a budget is only the first step in taking control of your spending. You also need to stick to it. And that's where things fall apart for many people. The good news is, Dave Ramsey has shared a secret for keeping on track that could make a huge difference in whether you actually stay within your spending limits.

Here's what Ramsey says to do to stick to your budget

Ramsey said there's one "secret to staying on top of your budget." And, the good news is, it's something everyone can easily do: Tracking spending.

"When you buy something, when you pay a bill, when you spend money at all … you need to put those expenses in your budget. That way you'll know exactly how much you have left to spend."

Ramsey says you should track all of your transactions throughout the entire month, rather than waiting until the end of the month to add up what you spent on each category. By doing that, you can adjust course during the month if you're starting to go over. By contrast, if you wait until the end of the month and discover you've gone over your budget, it will already be too late.

Here's why Ramsey's absolutely right

Ramsey is absolutely spot on when he suggests that "tracking your transactions is one of the single most important ways you'll keep up with that monthly budget."

There are actually a few reasons why that's the case. As Ramsey points out, tracking spending as you do it allows you to keep tabs on exactly how much of your budgeted money you've spent on a particular category. If you see you've budgeted $800 for groceries for the month and have spent $450 in the first week, you know you're likely to go over and need to make some big changes before you get stuck putting groceries on credit cards that you can't afford to pay back.

Aside from being able to see where you are with regard to your budgeted funds for different categories, tracking spending can also help in another way. The very fact of knowing you have to record each purchase can make you think more carefully about whether you really want to go through with buying something -- especially if doing so would end up putting you over your budgeted allowance.

Ramsey recommends using an app to track your purchases, but you can also do this process manually by just writing down each transaction and adding them up or putting them into a spreadsheet. The important thing is to find a system that works for you that lets you see in real time if you need to tweak your spending to stick to your budget -- and that forces you to pause for a second to see if buying something is really what you want to do.