When people hear the word “budget” some folks act like you pushed an old lady off her cane! It’s a bad word and most assume it means you don’t have money to do anything and you are living in poverty. It’s pretty much the opposite. Budgets allow you to do most things you enjoy while also being a financially responsible adult. As Dave Ramsey once said, “A budget is telling your money where to go instead of wondering where it went”.
That was always my thing. It just irritated the stew out of me when I would have $300.00 and in a weekend it would get up and walk off and I’m left posting “money missing” signs on trees. Like where did it go? For the most part, I was decent at managing money. But for the for the past few years, I have been in a place where I have become more intentional about my money and building wealth for myself and those who will come behind me. By the end of 2019, the only debt I will have, is my home and a student loan. I don’t use credit cards or owe for anything other than household bills. I began contributing more to my “just in case account” or what some would call an emergency account, to my savings, and 401K. Yes, I still take vacations and occasionally splurge on things I really want. Now I just do it a little more purposefully.
Here let me show you. I make a small budget every other week for the money I take in. I count all sources of income: my regular paycheck from my 9-5 employment, any goods I create and sell, writing gigs, and any services rendered through my event or organizing businesses (Kimberly Elaine LLC) and any other income sources. Then I make my list. It’s so important to write things down. I know, I know you keep it in your phone, but there is nothing like pen to paper. For the sake of this example, let’s just go to my regular 9-5 pay which I use for my household bills. Ok, so back to my list. Write down every bill you have to pay with that amount of money. If it’s due before you are paid again it goes on the list. If you have any charitable giving you do, like tithing or any other charitable contributions, write that down also. Your list should also include how much you plan to place in your “just in case/emergency” account and savings. Savings should be totally separate. Emergency money and savings are two different things! I pay myself also. I typically give myself at least $100.00 for my “fun money”. So if I see a cool journal or sweater I want, I use that “fun money”. It’s like limiting yourself but not limiting because you can spend it on whatever you want. Then I have “grocery money/dining out” and “household” money; I do those every time. I typically also budget in fuel, but that varies on where I HAVE to go. If there is another expense I know is coming, say an oil change, I will adjust the household budget since it includes car care.
It’s pretty simple and keeps you from overspending. It also helps with discipline and figuring out what’s important to you. Do you reeeeally need that 14th pair of boots? Or the latest designer handbag? You may just want it and hey that’s fine too. Just remember to save up for it. By the time you save your spending money to get it, you may realize you can live without it. The biggest thing is that budgets help you to become a good steward over what you have now so you can be responsible with what you get later and hit those financial goals! What? No financial goals?! Well we are going to need another blog for that one. Recently, I was reminded of how my father used to say, “You can’t go all the time” simple words that I have learned to live by. I can’t go (or spend) all the time, not because I am broke, but because I am beautifully budgeted.
If you would like more help on budgeting, a sample template and setting attainable financial goals, feel free to email me at firstname.lastname@example.org I’d be happy to help!