I’m not that great with a budget. I’m good at portions of it, such as making sure all our expenses are paid and things of that nature, but after that I don’t see any real point in bothering with a budget. We’re already saving, right? Why keep budgeting once all that is cared for? To be frank, I suck at budgeting past the basics. It drives my husband nuts. He thinks that we should budget for our entertainment and our shopping and our travel; but he’s a banker and he is of a financial mindset. I think that we are already saving and we should be able to enjoy life. Naturally, I win that argument because I’m fun and he has no complaints about our life, but still; I’m not great with the entire concept of budgeting.
It’s something that I know others also struggle with. I admit that budgeting is something that’s tedious and not particularly interesting, and that makes it not really something any of us want to do. However, I’ve been doing some research and learning how to help others budget, how to be better at it, and how to help those who are kind of budgeting failures. There has to be a way to make it easier, right? Well, I’ve found a few ways we can make budgeting for dummies a real thing (unless it’s already a real thing, and then we will just call this something different).
Calculate your income
This is where things get a little crazy for some people. I know, I know; it’s the first step and should not be that difficult. However, some people work for themselves. Some people do freelance work. Other people do work where they are paid overtime on a regular basis. It’s not always easy for people to determine what they actually make every month.
That’s why we need you to make it simple for your budget’s sake. What is the least amount of money you bring home every single month? Whatever the least amount possible is, write that down. Meaning, if you make anywhere from $2,500 to $5,000 per month, write down $2,500 as your income for your personal budget.
Calculate your expenses
Here we go with more complicated. This is where we fail if we make it past the first step. Why? Because it’s more “I don’t know,” in terms of finances. For example, I know that my mortgage payment and my insurance payments are the same each month. I know within $5 where my cell phone bill will be every month. I never have a darn clue what my utilities will be each month. In Florida, we can go from a low $250 per month in the winter when we open doors and windows for the gorgeous weather or well over $400 per month if it’s particularly hot and we use the air all summer.
Here’s where you have to budget and calculate for the highest possible expense. That means if your utility bill reaches $400 per month, you calculate it at $400 per month even if it’s $250 sometimes. Over estimate on this and not your income for the best possible results.
Take a look at your expenses and your income. Right this very second, is there anything you can do in your life to increase your income or decrease your expenses? If you can, do that. Even if your expenses are below your income, you still want to save more money, right? Do that; and then add those savings to your own personal savings account – because, yes, your savings account is one of your monthly expenses.
Open several savings accounts
Here’s where you’re going to learn to succeed in your budget. You’re going to budget for everything, even if you don’t have to or feel you need to. You’re going to put money away for your emergency fund in one account. You’re going to put money away for vacation in another, and one for Christmas in another. You can take the money you don’t spend from your pre-planned budget each month and allot that toward any of those accounts or you can contribute a bit each and every week to those accounts. The key is to save for those things so you are never, ever over budget on any given month.
This is where we think you might just succeed. Now that we’ve explained the stuff that sometimes becomes even more tedious and boring to you, we want to reward you. It’s not easy to make a budget and then stick to it. So how about you reward yourself for sticking to your budget for two weeks? A night out for a cocktail with the girls, a pedicure or a date night or something if you can make it two weeks under budget. Now reward yourself for making it a month. It doesn’t have to be anything big; it can be your favorite latte at Starbucks; just reward yourself at small milestones.
This gives you something to look forward to and it helps you to feel accomplished. When you get to celebrate something, you feel victorious and more likely to follow through, stick with the plan and make saving a habit.