Is it IN the Budget, Dear?

Your budget is a living document. That means it SHOULD change from one month to the next. If there is something you want to do in the month of October, plan for it and put it in the budget now. If you need to add a new budget item, go ahead. While a budget needs to be simple, you don’t want to make it TOO simple. If you only have 4 categories: (Food, Gas, House, and Entertainment), then you’ll have a little trouble tracking where things go. Which of those four categories is going to cover your Car Insurance or your Cell Phone bill?

So add some categories to your budget as the new ones crop up, and make adjustments to the amounts. Here are some of the categories my wife and I have:

Tithe
Savings
Mortgage
Electric
Water
Home Owners Association
Waste Mgmt
Cell Phone
Netflix
Auto Insurance
Food AND DEALS
Gas
Kids Allowance
Entertainment
Clothes
Dr. Visits
Car Repairs
Birthdays and Gifts
Brownies
Home School Costs
Travel Expenses
Fees
House Maintenance
Other

See what I mean? Some months these items will have a ZERO budget, meaning we don’t expect to have a transaction that month. We’re not done adding categories by the way.. there are still things that we haven’t planned for yet that will crop up in the next few months. When they happen, we’ll know it. As of this moment, I don’t have a Christmas Budget or a Date-Night Budget :)

One of the challenges with budgeting comes when you want to do something this month that you didn’t plan for. Should you still do it? If you and your spouse want to…YES! Have a sit down, discuss where the money will come from, adjust the numbers and go have fun. As long as both of you agreed to it then you can both have fun and no one gets hurt and no one feels guilty. Communication is KEY.

This is HARD to do, and don’t think I’m perfect either. I’m just like all of you…I screw up all the time. When it happens… apologize and move forward. While it’s easy to say that you must be 100% honest with your spouse about major purchasing decisions, our selfish natures get in the way sometimes. So lesson learned right? Don’t change the budget without your spouse.

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Creating a budget

Someone just recently asked me “How do you start creating a budget?”

Well, my friend, there are two parts to consider.  First is knowing how much you currently spend and the second is planning your future spending.  You really have to do both otherwise your budget won’t be based in reality.

Tracking your spending – First, you can’t make a realistic budget without first knowing what your reality looks like.  This means you need to write down what you spend everyday.  Now, a lot of people will suddenly change their spending habits the instant they begin writing things down.  Why is that?  Is it because you KNOW you are overspending, but don’t want to admit it?  Just be honest with yourself. write down what you do, day in and day out.  Then you can take an honest look at your financial situation.

You may be surprised about how much you are spending on fast food, entertainment, candy, movies, gifts, etc.

You can’t change what you don’t know.  Just be honest with yourself (and your spouse).

Planning – after you have a REALISTIC picture of what a months spending looks like, you can now make changes for next month.  Let’s suppose you now know that you spend over $100 on fast food, and you’ve been feeling VERY guilty about it.  Now you can set a goal to spend only $75 on fast food.  Now, you can go enjoy fast food without the guilt because now you’ve BUDGETED for it.  Hopefully you found good use for the other $25, such as a special gift for your spouse.  Plan to make changes in the areas that you overspend, and plan for MORE room for areas that need attention.  Maybe, you don’t have a car repair fund yet.  Now it’s time to budget for expenses that you KNOW are going to hit you someday, (like new tires), and set aside some money for that planned expense.

Start by tracking, then once you know what you’re up against, start planning.

Write it all out, and take a look at it with your spouse.

Allow yourself some flexibility.  Don’t beat yourself up if you blow your budget either.  It’s a tool for you, to help you accomplish your goals, not a cage to keep you pinned down in deprivation.

If you’ve never created a budget before, try it out.  It doesn’t have to be perfect, just start today!

Tell me about your budgeting experiences, have you every blown your budget big time?  On the other hand, how much has your budget helped you and your life?

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