Sometimes it feels like we’re moving at a snail’s pace when it comes to getting ahead doesn’t it? I mean, if things could just change over night it’d be so much better – but it doesn’t.
This is where financial budgeting comes in!
Besides life insurance, financial budgeting is one of the only other personal finance topics that makes peoples’ skin crawl!
It sounds so constricting, so enslaving and many people feel a financial budget will sap their freedom!
But, I’m here to tell you from my own personal experience as well as experience working with others that financial budgeting is one of the most liberating things you can do with your money!
Why?
Because when you know exactly what you can spend without having to worry about sending yourself down a debt spiral, you can spend without guilt, without remorse and with a lot more happiness!
My wife and I recently reworked our financial budget and it was good to put some checks and balances into what we were spending.
We realized that we were spending waaaay to much on going out to eat so we put a cap on it and last month was a great month!
We enjoyed our going-out-for-dinner-times and when we reached out limit we stopped!
We both felt great about it!
So how can we get back on track and stay on track with our financial budgeting? Take a look at these ideas:
Make Financial Budgeting a Family Affair
When everyone is working together toward the same goal you are more likely to stay on track. It’s so difficult if you have one spouse who is gung-ho for saving, budgeting and getting out of debt and the other one is not on board!
Check Your Budgeting Progress Regularly
Ideally once a month you should sit down and review how you did and make any adjustments as necessary.
You may have budgeted $300 monthly for groceries, but you find after a few months it isn’t realistic. It’s OK. Make your adjustments by increasing your budget in some places and reducing it in others!
Make Financial Budgeting a Lifestyle
Think of financial budgeting as lifestyle, not just some crash diet! Make it part of your life and with some discipline you will reap rewards.
Once you build your budget into your lifestyle it will soon become an effective habit that will transform the way you handle money and help you get on your path to saving in a Roth IRA or other retirement accounts!
Start Budgeting at the Right Time
This one is so key! Don’t start when you know it will be difficult (e.g, right before the holidays or before a major vacation that was already planned).
This would be like starting a diet the day before Thanksgiving! You have to get the timing right in order to stay motivated.
Take a Look at Financial Budgeting Software to Help
Find a budgeting system that fits your needs - budgeting software like Mint.com can be a very useful tool. There are plenty of others out their like Budget Pulse or Quicken or Gazelle Budget
Automating often makes it easier to stay on track.
Build Rewards into Your Budget
This is another big one. The reason so many people hate to budget is because they often cut out all the fun stuff! Keep fun stuff in there and make it a reward system.
For example, if you stay on track over the next two weeks you get to go out to eat at your favorite restaurant. Or – if you spend less than your budget this month you get to go buy a new outfit.
Build that into your budget and you’ll be motivated to make a game of it and stay on track!
What Advice Would You Give About Financial Budgeting?
Got any tips to share? Let us know in the comments below!
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{ 20 comments… read them below or add one }
Jason, great tips. I’m glad you mentioend the freedom wtih budgeting. Many people see it as just the opposite, but like you, it’s liberating to in that you can spend without guilt when it’s in your plan. The only additional tip I would provide is to budget with the right categories. What’s right? It will differ for everyone, but find the template or tool that works best for you. I think Dave Ramsey and Crown have good templates that cover most of the basic categories. You can drill down deeper if it helps, but may create more work.
.-= Jason @ One Money Design´s last blog ..Budget busters: How to save money and control spending for housing =-.
What about not having any accessible money and living on razor thin funds every month so one can’t egregiously spend money away? I like the going broke to win big idea
.-= Financial Samurai´s last blog ..Play Games To Save Money And Achieve Your Goals! =-.
Great points! I totally agree that budgeting is a LIBERATING process, not an enslaving one. Most people are surprised how far their money really goes when they are intentional with their spending. Similar to your experience, I am able to spend more on clothes, etc. and feel great about doing it b/c I have a plan! I wish this was a skill and attitude we taught in our schools.
.-= Deacon Bradley´s last blog ..In God We Trust… Right? =-.
And as Dave Ramsey always quotes, “you tell your money where to go instead of wondering where it went”. A great way to help you reach your financial goals.
.-= BibleDebt´s last blog ..Outsource Your Job – Then Catch up on Sleep =-.
Great tips!
When I first started budgeting I never realized how WRONG it would be for those first few months. It really does have a learning curve. But just like riding a bike, it gets easier with practice.
I called it a spending plan instead of a budget because it made me feel better
Spending plan sounds like you get to spend money, and budget makes you think you can’t!
.-= Jaime @ Eventual Millionaire´s last blog ..What Type of Spender are You? =-.
I like the idea of having rewards and keeping some fun in the budget. It is like dieting, if you deprive yourself of everything, there is a good chance you will fall off the wagon and binge on everything.
.-= Kristia@Family Balance Sheet´s last blog ..$500 Challenge Update and Mr. Linky Test =-.
Thanks J – categorizing is a huge key as well and also to remember that these can be tweaked and changed as you go along and develop a better and better budget.
Samurai – more and more people probably need to go that route of keeping money inanccessible! I like that commercial where the lady is trying to get her credit card out of the block of ice so she can order something from an infomercial! We need more drastic measures like that!
Deacon, I agree, this should be taught at an early age – it certainly would’ve helped me!
Bible Debt – yeah, Dave makes a great point! Too often we have no idea where it all went, but when we’ve got a budget we can be in control of our money rather than it controlling us!
Jaime, Spending plan – I like it! That sounds much less restricting!
Glad to hear you’ve made it through the learning curve!
Kristia – So true, you definitely don’t want to go on these crash and binge diets with your finances because it just fosters horrible behavior. Build in some fun and treat yourself when you reach certain goals! Enjoy it as much as possible and you’ll have more success and it will become more of a way of life!
I like the idea of having a monthly budget meeting. While things were really a mess for us financially my wife and I met once a week and set an appointment so we could track our progress and make the need adjustments. This was huge for us, I’ll admit we had some “spirited debates” but it worth it in the end. And your right, many people think that budgets will suffocate them but I’ve always found it easier to breath and liberating knowing exactly what’s going on with our money!
.-= Carlos Frank´s last blog ..Where Is The Proper Place For Your Money? =-.
My advice would be not to forget the VARIABLE EXPENSES..the ones that don’t happen every month. My wife and I set up a second checking account for these things (oil changes, tire replacement, clothing, etc). We estimated the price of these items and divided by 12 (months) and transferred that amount to the second checking account every month. When we go to pay one of these we write the check from the other account.
.-= Ken´s last blog ..The Blessings of a Second Job =-.
Carlos – a monthly budget meeting is a great idea. It’s important to track progress and the sooner you realize you’re off course the easier it is to steer back on. I’m glad to hear a lot of people feeling the same way – that budgets are actually liberating, not constricting! Keep up the great work!
Ken – great point about variable expenses…those are VERY easy to forget and end up hijacking the budget! You’ve got a great way to deal with those…nicejob!
I created a series on budgeting (based on my personal successes and failures) in the hopes that it can benefit people. Maybe it’ll help your readers too.
http://nodebtforus.blogspot.com/2010/02/excel-budget-spreadsheet-how-to-budget.html
.-= TexasT´s last blog ..Excel Budget Spreadsheet – How to Budget =-.
Hey, i now have spent a good time browsing your blog and basically thought i ought to be courtesy enough to pass comment. i have definitely enjoyed your own content and i pray you will certainly continue upgrading it for myself and other people which appreciate reading it.
Tips for Budget Planning:Home Expenses The first group of expenses you need to add to your budget is your home expenses. As we all know, home expenses are a priority. ” I don’t think I can afford it this week, the rent is due” or ” I’m trying to save money, because my house payment is ….
Well just what i was looking to gain……Wonderful post as always.,….Loved it……Cheers!!!
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