Budgets are kinda a four letter word to a lot of people, aren’t they?
Some feel like they are useless because life throws to much unpredictability at us.
Others feel like they don’t have the character to stick to one, even though they dutifully make one each month.
Where do you fall? Somewhere in between these two extremes? Let me know in the comments below!
I always felt like a budget was something for people who had money to use.
They didn’t really apply to me because the money was usually gone before I even got the check.
Now, I realize that is a very childish attitude to have. And that budgets aren’t these things that you prepare once a month to make you realize that this is going to be yet another hard month.
A budget is more than a plan and a backup plan, even.
It's actually a living document that’s constantly challenging.
Seriously, I update my budget every day.
What a Budget Is
Don’t think of your budget as a list of categories to put your money in.
Instead, think of it as a fence.
It is a way to keep you in a secure area, one where you are protected but still allowed the freedom to play and move. A way to keep the dangers of the world out while letting you explore.
What does this mean in practical terms?
Most simply, it means that you create your fence and then stay within its limits.
Sounds easy, but it's not, I know!
How to Create a Budget That Works!
The problem with budgets is that a bad one will not work.
You will not stick to it.
Good ones don’t just jump onto your page.
And schools or college don’t usually teach people how to create a solid budget.
A strong budget begins the month before.
You must TRACK your spending to know what are realistic amounts you spend on each expense in your life.
Do you need help creating a budget? Click here to join the Wealth Reboot Challenge!
Track my spending? Write down every penny that I spend?
It sounds so tedious. But really, it’s not.
I mainly use my bank account because they do it for me! You just need to use a highlighter to go through and make totals in each of your budget categories like groceries, home supplies, fast food, etc.
If you withdraw a lot of cash, keep your receipts and go through them at the end of the month.
Avoiding Budget Failures
So I talked about thinking about a budget as a fence that allows freedom but still keeps you safe and protected.
To avoid failure, you must be able to wiggle in your budget.
But some budgets don’t have wiggle room. Ours rarely does.
So you may need to get creative.
Sometimes, you may need to juggle bills to free up cash to pay for medicine or whatever minor emergency may arise.
One thing we do is pay half our mortgage payment early in the month and the other in the middle of month.
This frees up a bit of cash to help us get through the next check, and we are lucky that our terms do not charge a late fee until around the 15th! It also allows to pay a bit extra on the
mortgage in that second payment, reducing our principal balance and paying off the mortgage faster!
I suggest making a creative plan B every time you tweak your budget so you have a plan and don’t get hit with that inital stress of “What am I going to do?” if something big happens.
Hi! I am Ali, a homeschool mom who is passionate about science, managing my money and time well. Unfortunately, with an army of tiny faces, I am always still kind of a mess.
I was tired of not having a judgement free place to talk about money troubles with other moms. So I created one!
Click on the picture above to join my Facebook Group, Money Savvy Mommas.