Budget is NOT a Four Letter Word!

So as I sit to write another article at the beginning of the year, money matters are in the forefront of my mind. I don’t intend to write a year’s worth of money articles, but I did want to talk a little about budgeting, after talking last month about savings. As I shared, my family has found some easy ways to boost the savings account a little bit. That said, creating a budget has been the number one way we have gotten a better grasp of our finances. Rather than just living paycheck to paycheck with no real idea of where our money is going, we sit down and we tell our money what we want it to do. It isn’t perfect and sometimes there is more month than money, but we are much more in control with our budget than we were before.

Here are a few of the things we have learned:

First, a budget is not an ogre telling you that you can never have anything, do anything, or go anywhere. A budget is just a plan…a to-do list for your money, if you will…I think it actually gives you permission to buy things. You create the budget categories you need and then that money can be spent on that category. We all need clothing, there is a category for that. Go get some clothes. Have no guilt. You want to go out to eat and to a movie…we have a category for that. Go do it. Don’t think of the budget as telling you what you can’t do, but instead what you get to do because it is in place. You cannot spend freely though, so a budget helps you determine what is appropriate and when you will need to stop spending.

Second, a budget is not a one-time thing. It will change from month to month… you need to make a new one each month. When we began budgeting, I was not sure where to start. I found a template I liked online that gave some budget categories with some percentage ranges. These are not a one size fits all kind of thing, but rather a helpful tool to know where to begin. We tweaked those percentages through trial and error and still use those figures to begin with when breaking down our paychecks. Our family gets paid weekly, so we create a new budget each week (with some specific things that need to be done with that particular check). Those categories sometimes need to slide a little as the heating bills are higher in the winter and the gas category isn’t as high because gas prices are down, for example, but again are a framework to begin with.

Third, communication is the KEY! Being the math nerd of the family, I LOVE creating the budget, and it might even be right. If my husband has no input, it is not OUR plan, no matter how perfectly the decimals align, and then the budget can be tossed aside by one splurge at Michael’s or Home Depot….and who really cares anyway and let’s just forget it all. It just doesn’t work. Sit down together with the outline, the bills, the things just on the horizon and have a conversation and be in agreement about what happens.

Finally, remember, a budget is just a plan for your money, not a four letter word! You will feel much more in control financially when you have a budget in place, won’t have as many things pop up and say SURPRISE, and may even find there is a bit less month at the end of the money! We have learned A LOT by listening to Dave Ramsey/reading his books. If you need some help in this area, I HIGHLY recommend his materials.

Originally Posted at Home and School Mosaics