When most people hear about a budget, they automatically think it is something bad. Society has taught us that a budget restricts what we can do with our money. How many of us have said, “It’s not in the budget.” Or “The budget says we can’t do that.” News flash everyone…a budget is an inanimate object!!!! It does not tell what you can and can’t do. People use this excuse all the time so they don’t have “to be the bad guy”. I get it. I’m the saver in our family and my husband is definitely the spender. I used to joke that if I gave him $5 he would pay dogs to eat because he just has to spend money when he has it.
Let’s get into what a budget is…
To put it simply, a budget is an estimate of income and expenses; it is something that tells your money where to go. It actually gives you permission to spend money. This was the hardest thing to convince my husband of because I don’t think he had ever done a budget before he met me. As a little background, I’m an engineer…so yes, I love nerdy stuff and spreadsheets are no exception. Robb is in sales, so there’s something wrong with how his brain measures risk. Haha! It’s a very hard concept for him to understand that most people can’t just sell more and make more money. Now, I could get a second job and make money, but I don’t want to do that. So for Robb, if he spent more than he thought, it was fine because he would work harder the next month and make more money. Back to our budget, I’ll admit I thought it was really restrictive at first too, but as I got into the numbers, I realized after we paid our bills, we actually had more money than I thought. Our budget accounted for everything from groceries, bills, gas, to hair supplies, gift money, and everything in between. That is key in developing a budget, make sure you account for everything!
Creating a budget
There are great tools online to assist with making a budget. My favorite by far is Dave Ramsey. He has categories for everything you can think of. I used his outline the first time I started budgeting to make sure I covered all my categories. I made my own Excel sheet, but he has an app or you can simply print one from his website.
Tips for creating a successful budget:
- Make a zero balance budget – This means you should allocate all the money coming to a category in your budget.
- Don’t expect to be perfect at first – It can take up to 3 months to get your budget under control, don’t be hard on yourself if you miss things…but, don’t use this as an excuse to go over your budget either! Be honest with yourself!
- Make a month specific budget – Expenses change every month, therefore your budget will change every month. Don’t rinse and repeat….look at your expenses for the upcoming month before the month begins.
- Separate your categories – If you leave everything in the same pot, you will “borrow” from yourself and will never get your budget under control.
- Track your spending!! – Just because you have a budget doesn’t mean you automatically spend what it says. Make sure you track your spending to ensure you are staying in your budget.
- Plan in advance for known expenses – These include things like tires for your car, Christmas gifts, etc.
Every family is different, so you have to take these principles and tailor them to you so you will stick with it. For example, I love my Excel sheet, but you may like a paper budget. My husband doesn’t like to carry cash, so I took that principle and made them virtual. I’ll go into more details on my envelope system in another post.
Now that you know a budget is not meant to be mean and not let you have any fun, it’s time to start budgeting!