Doing something new and different with your money, like starting to budget, can seem difficult or discouraging at times. If you are feeling like your new budget doesn’t work, I’d like to offer some encouragement as you work to reach your financial goals, whether you’re trying to build a savings account or emergency fund, or just not be out of money at the end of the month. Having a budget will help you reach your long-term goals. Developing a spending plan will help you keep your monthly expenses in check and will help you prepare for unexpected expenses. If you haven’t started to budget, now is a good time!
I was talking with someone today who was starting to budget for the first time. They said they didn’t think the monthly budget they had come up with was a “good” budget. The first one usually isn’t. I’ve read that it takes a good three months of working on it to get your budget fine-tuned. I’ve found that budgets are constantly evolving creatures. Expenses will vary based on a variety of factors, so you will want to update your budget on a regular basis. It takes time to build your confidence in creating your budget. So if your budget doesn’t work just right at the moment, don’t despair! Keep trying. You’ve taken the first step: Recognizing that you need a budget. You will get there!
Here are some of my thoughts on the early stages of budgeting.
Tip #1:Applaud yourself for your efforts!
Even if you went over in some budget categories on the first budget you created, how much extra money would you have spent had you not had your budget and spent time accounting for each dollar that came in and went out? You are making an effort to take control of your finances, and that is an accomplishment you should be proud of! Unexpected things happen. Learn from them and apply this knowledge to your next budget. It takes time to develop new spending habits. Going over on your budget in the beginning doesn’t mean that your budget doesn’t work. It means that you haven’t been budgeting long enough to work out the kinks yet. It likely took time for your financial situation to get where it is, so it may take time for it to improve.
When I was first starting to budget, I highly underestimated how much money we needed for variable expenses, like groceries, household goods, personal care items and pet supplies. I found that things added up to much more than I’d anticipated. I had to increase my budget amount for these things, because in the beginning, I did not have a realistic budget. After adding up your monthly income, a good next step is to go over your bank statements, pull your bank account up online, or go through your receipts to get a good idea of what your variable expenses will be. Also look at your regular expenses and fixed expenses and see if there are any ways to spend less there.
Tip #2: Have a clear goal.
Few of us spend time working on our budgets because we just want to see how we spend our money. The common reason for starting to budget is to gain control of our personal finances, and we usually have a reason for wanting to do so. In our home, we’ve had different reasons for living on a budget over the years. First, it enabled me to remain a stay-at-home wife and granny. If I had worked outside the home, I would have been less available to help care for my grandbabies and help older family members. Now, I own a family child care business and we are living on a budget with the goal of being debt-free in three years.
Maybe your goal to is to save money to purchase a newer car, or you want to put a down payment on a home, or you dream of paying down credit cards or student loans. Keeping in mind why you’re starting to budget can help you stick to it when you’re tempted to spend on things outside your budget.
Tip #3: Try to work some things you enjoy into your budget.
We are trying to still have things we enjoy while we are working on our budget. I can get a little extreme wanting to cut things out completely. Grampy reins that in and reminds me that we should have some of the things we enjoy, even while we are trying to work toward our budgeting goals. So, if you can, find room in your budget for some of the things you like and enjoy. Just have them less often. I think that an occasional treat can help you keep from burning out on budgeting.
Tip #4: Don’t look at your budget as a negative thing.
Your budget is not there to tell you all the things you cannot buy or do. It is there to show you the things you can do within the guidelines you’ve set based upon the money you have available.
Grampy and I differ vastly in our opinion of restaurant food. I could go months without going out to eat. He would happily visit a restaurant any day. If I were to completely remove the restaurant category from our budget, we would have a problem at our house! Grampy will go along with just about everything else in our budget as long as we have the occasional lunch date. This way, we stay within our budget and he has restaurant food occasionally. We could go more often, but we are choosing to save that money or put it toward bills. Having a budget puts you in charge of your money.
Tip #5:Starting to budget may help you make positive changes.
I had a good friend who lived almost an hour away from me. We were both members of a writers’ group that met once a month. After the writers’ group meeting, my friend and I went out to lunch and then went shopping. This little outing usually ended up costing quite a bit of money for each of us every month. (Because, Hobby Lobby.)
Eventually we began attending the writers’ group less often, and about the same time my friend and I both decided to pay more attention to our spending. Instead of meeting in town and having lunch, I packed a lunch and drove to her house. We met at her house because the grandbabies were usually at my house. Her house was more calm and quiet. She made her lunch at home and we spent the whole afternoon visiting. We found it was much more relaxing to do this than to run around town shopping for things we probably didn’t need anyway. Because we started budgeting, we found a way to enjoy our time together more.
What positive changes can happen because of your budget? Maybe you will eat healthier meals if you are cooking at home. Maybe you will gather less clutter in your home because you are doing less unnecessary shopping. You will certainly enjoy the peace that comes with having a plan for your money.
Tip #6:Give yourself grace.
Don’t give up on yourself or your budget, especially if you are just starting to budget. Even after you’ve become a pro at managing your finances, there may be times things don’t go as you had planned. It’s all a process. Give yourself grace and start again. I know you can do it!
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