Budgeting: The One Step You Should Never Skip

There are many approaches when first beginning to budget…Set up an app, or make a spreadsheet, or create a paper budgeting system or track your expenses for a month to see how much you’re spending in different areas. I think that there is one very important step to take before doing any of these things.

Find Your WHY.

Budgeting is hard work. Without a concrete reason to stay motivated, you can find yourself slipping back into the habits that created money issues for you in the past.

Your “why” can be any reason that’s important to you, but it’s important to be specific. “I want to spend less” or “I want to have money in savings” are not specific. “I want to cut my food budget by $200 per month so I can apply that money to paying down my debt” is more specific and will help you stay on track. In this example, you are budgeting because you want to pay down debt. You can further refine your reason to something like, “I will cut my food budget by $200 per month, and apply that money to paying down debt. When I have no credit card debt, I will begin saving for a down payment on a home.”

Living on a budget takes discipline and willpower. Sometimes my discipline and willpower aren’t the greatest. My dad was a very good money manager. I think it just came naturally to him. Unfortunately, no one sat down with me and taught me how to manage money or make a budget. So I’ve taught myself. You can, too, and the first step is figuring out what motivates you. Find your Why.

Having a “why” for budgeting makes it easier to make decisions.

Let’s say I’m the person who is wanting the cut the food budget by $200 per month, pay down debt and then begin saving for a down payment on a home. It’s Friday night. I’ve had a hard week, and it sounds so very nice to call and order pizza. No cooking. No dishes. And only $30 to feed my family. I reach for my phone. And then a picture of that cute little house I want to save for pops into my head.

One takeout meal of pizza may not seem like a lot of money, but little amounts add up, whether they are spent or saved. Knowing my reason for budgeting helps me decide even about little things and helps me stay on track. Yes, it would be nice to have a night off from cooking. But for me it would be nicer to stay within my budget in order to one day reach my goal.

Little amounts of money add up, whether they are spent or saved.

A solid reason for budgeting gives you a sense of purpose–and a sense of peace.

Budgeting is not for the unmotivated. It requires time, commitment and often sacrifice. But the results can be so worth every bit of the work. Paying off a bill, or saving up money for a major purchase are things your budget can help you accomplish. And it feels great! When you are committed to your reason for budgeting, you have a clear purpose for the decisions you make.

Living on a budget can sometimes be discouraging. Life can certainly throw some obstacles in your path. You can make a budget, be diligent about sticking to it, and then an unexpected expense can come along and set you back for a bit. It can be easy to give up and go back to your old habits. Hopefully, your purpose for budgeting (your “why”) will be enough to keep you going. You might face a setback, but you can regroup, replan and keep going.

Knowing your reason for budgeting can also give you a sense of peace. While you might feel bad for some of the things you will say “no” to because they are not in your budget, remembering the reason you are budgeting can help you work through that. Aside from the obvious peace you will have when you pay off all your debt, you can have peace about decisions you make along the way, since saying “no” to something now can mean saying “yes” to something more important later on.

Once you’ve found your budgeting “why,” make it real.

Write it down. Put it on a sticky note in your wallet so you see it when you pull out your debit card. Put a picture of your little dream house as the background on your phone screen. Keep a journal of your thoughts and progress. Create a vision board. Share your plan with someone you know will encourage you. Do whatever will help you keep your reason for budgeting fresh in your mind. And then go forth and budget!

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