When someone throws the B word in your face, you are instantly triggered! It has to be one of the most hurtful things someone could say to a person. It is so belittling, judgmental, and offensive. The B word is an instant trigger that is basically fighting words. I mean, telling me that I need to Budget is just like telling me that I am financially irresponsible right? …… Wrong! The truth is, budget is not a bad word and no matter how wealthy you are, everyone needs a budget. Especially us moms that want to create successful money habits we plan to pass on to our children.
I know making this statement runs the risk of me sounding like a nerd, but I love to budget. Although I have a love relationship with budgeting now, I use to hate it with every part of my being. There was a time when money controlled my life because I didn’t know where it was going. I would look up just a few days before payday with a very low balance and no explanation as to where all the money went. Even when my income increased, although I always had money in the bank, I was throwing money away as opposed to building assets to create a legacy for my future generations.
When I first began budgeting it was very difficult and felt restrictive, but I have learned that with a budget I direct money to the places that bring me closer to my ultimate goal. I now have complete control over my money and it is empowering!! Knowing exactly what I can and cannot afford, I can tell you how much I spend on bills, groceries, entertainment, travel, etc. I can tell you the exact day my student loans will be paid off and I will officially be debt free! That, is powerful! But it all starts with my budget.
The first thing that prevents us from sticking to our budget is our mindset. It’s time to shift your money mindset when thinking about budgeting. Take control! Personal finance is very personal and unique to each individual. You (and only you) should set up your own budget categories and amounts you can afford based on your family priorities. The word budget should not be synonymous with restriction. Let’s use the word plan instead of the dreaded B word.
You should always budget in advance! I suggest that you create a budget no later than one month prior to the month the bills are due. Personally, I create a 12-month rolling budget. This allows me to account for variable, quarterly, and annual expenses. During summer months, my electricity bill increases significantly and at the beginning of every year my HOA expense is due. Budgeting in advance gives you a clear plan of what is expected and where your money will go.
I review my bank accounts and my budget daily, that may be a little obsessive but remember, I’m a budgeting nerd. The reason I check my bank accounts frequently is to ensure everything is processing as expected, there are no fraudulent purchases, and I am on track with my budget… I mean plan. Whenever I make a purchase, I update my “plan” as soon as I get to my computer. If I make a purchase that I did not plan for, I immediately adjust my budget. This is a daily reminder to stay focused and stick to the plan. I suggest that you check your budget as often as possible but no less than every time you are paid. There are several mobile budgeting apps that will help you track like Mint, Every Dollar, and YNAB.
Every dollar in your budget should have a purpose and be accounted for. After subtracting your expenses, extra debt payments, spending budget, investments, and savings from your income there should be a remaining balance of $0. It’s ok to roll money over for bills from one month to the next but, that should be documented and accounted for. When you leave money unaccounted for, it’s easier for you to spend that money frivolously because your brain thinks it is “extra”. Budgeting every dollar helps you to make educated decisions about where your priorities are. You will visually see how much you spend on necessities, entertainment, savings, and investments. This will be a reality check in aligning your money with your priorities.
Shifting your mindset, being proactive, planning for every dollar, and tracking your purchases will help you stick to the plan you make for your finances. Once you create a system, you too will no longer dread the B word. Because truth is, everyone needs a budget. Budgeting holds you accountable for being intentional about your spending and creates successful habits around finances.
If you don’t know where to start when it comes to creating a budget, I assembled a guide of six steps to creating a budget. I would love for you to check it out!
How many of you have found it difficult to stick to a budget? What are some tips that you would like to share that have helped you stick to your budget? Try these tips and let me know if it helps!
Until next time,
P.S. I would love for you to follow my journey to financial freedom on Instagram