If you’ve ever tried the budgeting thing yourself, hopefully you can relate with me for a minute. Picture it. A couple of newlyweds just returning from the honeymoon sitting down to have the “budget” talk. The couple reviews their monthly expenses, including credit card debt, student loans, and monthly living costs. And then it hits them, things are going to be tight, very tight, at least until both of them are contributing a secure monthly income.
If you hadn’t already guessed it, that couple was us. Thankfully, we are in a much better place financially now than we were even just those couple of short years ago. But, that doesn’t mean I don’t remember that talk like it was yesterday. What I remember even more of that talk is what came from it – our focus on our finances and our intention toward paying down our debt.
If you can relate at all, you likely have been there. That deer in the headlights feeling of what on earth are we going to do to make ends meet? And, the” aha moment” of we’ll budget like ninjas of course! Followed by the realization that “man, this budgeting stuff is hard…” I like to consider this cycle of feelings the financial feelings rollercoaster that most (or at least I hope I’m not the only one) experience. It’s what you do following that initial ride, though, that counts.
More Than Just a “Cookie-Cutter” Budget
What we realized in our earliest days of budgeting was that we not only needed a budget, but we needed to make it work for us – to be simple and straightforward enough to make it easy-ish to follow and certainly less stressful but comprehensive enough to make a difference. With that, we came up with some guidelines for making our budget work for us that I’d like to share with you.
1. Keep It Simple
While it may seem more beneficial to be hyper vigilant and track all of your expenses individually, I assure you it’s not. (Really, I’ve been there. It’s not worth it.) I suggest creating a plan that consists of 4 to 5 larger categories to begin with.
You might start with groceries, entertainment, living, debt, and savings and lump all of your spending into these main categories. You can make your budget as simple or complex as you want, just make sure the system works for you.
2. Build in Accountability
A budget is all well and good as long as you actually follow it. If you put in the time to create your financial plan but don’t do anything to work within it, all you’ve actually done is wasted your time (and you’ll end up wasting money too). You need to come up with an effective way to hold yourself accountable.
Some say the only way to go is using cash while others are techier and prefer a virtual method. Whatever works for you, just track your spending.
3. Be Realistic
It’s noble to think that just because you’ve decided to start budgeting that you are automatically going to cut out all extraneous expenses (and, it is if you do). But, speaking from experience, I know that mindset can add a lot of undo stress to the whole budgeting experience.
For example, we keep a weekly date night. Rather than cutting that expense out entirely, we decided to make our budget for weekly date nights significantly smaller to cut down spending. You don’t have to “cold turkey” anything. Just find realistic ways that you can limit your expenses.
4. Create Your Own Timeline
Most budgets and budgeting apps and programs are based off of a 30-day or month long period. But, many of us don’t function on this type of spending plan. Maybe you have a tendency to spend too much at the beginning of the month, leaving you with limited funds at the end of the month.
If so, you might want to consider budgeting for two weeks at a time. Others find it beneficial to plan based on each paycheck. Consider your spending habits and find a timeline that works for you.
5. The Budget Crux
Budgeting isn’t the same for everyone. We use these guidelines to help make our budget work for us, but you may find something else works better for you.
The point is that you find something that works and stick to it. An effective plan is one that allows you to make the most of your finances so that you can spend your time living life well.
What are your best budget tips? Have you found any tools that work for you?