Living on a budget.
Does the word budget make you sweat? Or make you squirm in your seat? Or maybe bring out the fight in you? Whenever my husband would ask me about money (where it went, how much was left, did I save any) I would immediately get defensive. Now, granted I wasn’t the best budgeter out there, but I did try my best. Unfortunately, my best didn’t always work. We always seemed to be short and the savings was minimal.
When I grew up my parents kept their money in envelopes - literally. So, when I got married I tried the same thing. I would go to the bank every week and ask for 15 20’s, 10 10’s, 25 5’s, 18 1’s, and probably a few quarters too. (they must have thought I lost my mind). I then filled my envelopes. And, the theory behind that is; I would not spend more than what was in the envelope. And that worked pretty well - unless I was short and ‘borrowed’ from another envelope. At one point I realized that I really wasn’t on a ‘budget’ - I was on a ‘spending’ - I was putting ALL the money in spending envelopes with no thoughts for the future - hence, no savings. I was told I needed a budget - but, what did that even mean, where to begin and why?
What is a budget anyway?
A budget is a plan to have money to spend, not only for today, but for the future. I know it is hard to believe you will be 60 some day. I NEVER thought that would happen to me.
A budget is an estimate of income and expenses. It is a opportunity to tell your money where to go - not the other way around.
Why is a budget important?
It is an opportunity for you to plan for the future. Dream vacation. College education for your kids. New furniture. New (used) car. Emergencies. Retirement.
It is an opportunity for you to pay off those credit cards. Pay off that car. Pay off that student loan. Pay off that mortgage. The interest you save alone is liberating.
It is an opportunity for you to be in charge. You are in the drivers seat - NOT the money lenders.
Since I put budgeting into place, I discovered that I love LOVE budgets. I love the freedom that budgeting gives me. I love seeing money being saved. I became a budgeting counselor and have helped many many women get their lives back on track. I loved seeing them feel more financial freedom than they have ever felt. Let me help you too.
5 THINGS YOU CAN DO TO GET STARTED
Make a list of your absolute MUSTS in expenses. Ie: mortgage (rent), utilities, car payments, car gas, groceries/paper products, credit card payments, loan payments, insurance (health, auto, life), auto (repairs/maintenance, registration, AAA). Do NOT include vacations, savings, books/magazines, gifts/presents, going out to eat, etc. Add all the musts up.
Compare your expenses to your income. Are your expenses higher or lower? The goal is to be at zero. Income - Expenses = 0.
If your expenses are higher you need to eliminate spending. Maybe not spend as much on groceries (don’t buy name brands). Cancel all magazine subscriptions. Turn the heat/AC up or down (depending on the season), don’t go to Starbucks. Cook meals at home. Cancel your cable. - Or maybe you need a drastic reduction in expenses. Sell that car and get a less expensive used one. Get a smaller apartment or house. Don’t have all those after school activities for your kids. Get a roommate.
Track all of your expenses for a month. See if you can make any changes in your spending habits.
Once you have an idea of where you spend your money (from #4) use cash instead of credit/debit. You can NEVER overspend with cash.
I have personally used all of these ideas. I have helped many women with their budgeting beginning with these 5 small budgeting changes. My hope is that you will begin too. I once heard ‘the borrower is the servant to the lender’. That stopped me in my tracks - I did not want to be a servant. I wanted to BE IN CHARGE. And, you can be in charge to. If you need help just let me know - hit me up with a comment or an email.
I will have a whole series of posts about budgets, money, credit cards, how to pay off debt - you name it; so please make sure to subscribe so you don’t miss any of my informative posts with, hopefully, life-changing results.