Budgeting is a love-hate relationship for me. I am usually very good about knowing how much I need to spend and sticking to it. Recently, though I’ve drifted away from consistently keeping track. There are a myriad of reasons to wander off-budget, many of which are relevant for this time of year. Holiday gifts, entertaining, new jobs, unexpected emergencies. For someone who does not have a budget, or who is not used to recording everything spent, it can be a challenge. It might feel like you are doing the best that you can, but everything is still left to chance. The next couple days I am inviting myself to give you some tips on how to stay within your means and present you with a couple easy ways to begin a budget.
First of all, what is the purpose of a budget? Why even have one at all? I began first keeping a record of where my money was going when I was still a teenager. I received just minimal allowance and had begun babysitting pretty consistently. I was saving up for several important things in my life. A rock polisher, a pet lemur, a peer-i-scope, just to name a few (practical, no?). Fortunately I had bought a book titled, How to be the Best Babysitter, or something like that, which included a section on saving money. Because I worked all in cash, I made tiny little folders and labeled the folders for every section that I had. For adults now this might look a little different, but the concept is still there. Categories that I included were tithe, savings, gifts, fun money, eating out.
I didn’t realize it at the time, but I was actually following an envelope system similar to the one that I learned much later, by Dave Ramsey. Ramsey is a guru of saving and budgeting, and I took a class of his about a year ago to practice saving and budgeting money. His website displays several different resources, but the two that I have read are Financial Peace University Workbook and The Complete Guide to Money. Total Money Makeover is another book of his that I received, but I never read that one, so no comment. I have heard some wonderful things about EntreLeadership for those of you starting your own business.
Remember, this is just a suggestion, based on what I have gone through and experienced. You might find something that works best for you. One of the apps that Ramsey suggested I still use today called, Every Dollar which comes with an online and a phone version. The basic one, which I’ve used for two years now, is free. It is a great online way to budget, which is perfect for me because it very difficult for me to keep up with extraneous paper.
If you are more of a paper and pencil type person, I recommend using a spreadsheet. You can make your own based on your categories, or begin with a pre-done spreadsheet, which can be found in Excel or online. These are always my favorite because the calculations are already inputted. Usually I work spreadsheets similar to how I cook. I take several spreadsheets that I like and end up combining them so I get exactly what I want. Either way, the approach is to find something that will keep you accountable for where your money is going.
I hope I have given you a first step into budgeting! It is a wonderful tool to help you become less stressed, more in control, and more aware of just where your money goes each month. Hopefully this can help you plan for the unexpected and open your finances to give more when you want to, which is always a blessing. Tomorrow I’ll be sharing a few ways to trim your spending while you’re on a budget.
See you tomorrow!