We’ve all heard it time and time again: “Make a budget and stick to it.” If only it were that simple, right? Budgets are one of those things that we all know we need it, but since they’re boring and can be tedious to stick to, a lot of people tend to just skip it. Trust me when I tell you that there is no easier way to shoot yourself in the foot financially than by not having a budget. If you’re one of those people, know that the very best thing you could ever do for your family and your finances is to make your budget and stick to it, but I know. Some of you don’t think that a budget really works. So let’s talk about whether a budget really saves you money or not.
When you first start a budget, you may find that your financial situation is worse than you expected it to be. Know what? That’s perfectly okay. I can guarantee that you’re not the only one who has had it happen and also that you certainly won’t be the last.
1. Why should I have a budget and how does it benefit me?
I’m going to admit something to you right now. It is not something I’m proud of..is not something I’m going to brag about and it is something that will never happen again. Normally I have a budget. Normally I’m rigid on sticking to that budget. The last 2 months however? I’ve let my budget fall to the wayside. The result? I woke 3 mornings ago to find my checking account$116.00 overdrawn. Yes. You read that right. ONE HUNDRED SIXTEEN DOLLARS OVERDRAWN.
“Stacy, HOW did that happen exactly?”
Well to be honest? I’m not 100% sure. Why am I not sure? Because I haven’t kept track of anything for 2 months. So I can’t tell you where the extra $116.00 came from.
That is the importance of a budget. Having a budget allows you to not only know what money has to come out of your income, but where any extra money is going as well. Budgets allow you to stay on top of managing your money…which can be a formidable task sometimes.
Using a budget is also a great way to save. When you have it on paper (or whatever form you’re using) in front of you, exactly how much money you have left at the end of the month, you’re going to want to start saving some of that extra cash. If, on the other end, at the end of the month you consistently have nothing left? Your budget will allow you to look back and see where you are able to make some cuts back each month.
2. Okay, I’m curious. Tell me though…what should my budget include?
Ideally, your budget should include 3 things. One, your total income. This should include ALL money coming into your household, whether it’s a weekly paycheck, Social Security or that $3.00 survey check from Pinecone Surveys. (Come on Mama’s, you know what I’m talking about there). Two, your budget should include ALL expenses you have coming out. This includes your rent or mortgage, utilities, groceries, student loans, gasoline, cigarettes (if you have that habit), and Fido and Fluffy. Also, if you’re someone who buys clothing every month, add that into the budget. If you routinely spend hundreds on your brand new Jeep? Add that. You need to add in every single item that you routinely pay for. Third, your budget needs a spot to record when these items were paid for and how much was paid out.
Any time that you spend cash you need to input it in your budget…even that $1.19 cheeseburger from McDonald’s or that $5.00 coffee from Starbucks (although if you’re reading this blog and spending that much on 1 coffee, I have to wonder why you’re reading this blog…lol). Doing so will allow you to really get a good idea of exactly where your money is going which in turn, will help you in the long run.
An ideal budget will compute the differences for you, but if it doesn’t, be prepared to do the math yourself. When you add in an amount that you spent, you need to subtract that from your total income right away. Don’t wait. If you wait, you will not be 100% aware of how much money you have left for the month and you’re likely to eventually end up in a situation like I found myself this week.
3. So Stacy, just how do I get started with this budget thing?
No worries, I’ve got your back on this one. Here are a few of my favorite sites to find good budget worksheets. They’re all free to use or free to print. What I would highly recommend is that you take a look at each one and combine their ideas into one that works for you and your family. They each will likely not fit your family 100% because they were not made for your family. Combining the parts that do work however will land you with one kick butt budget that is tailored to your family and your family alone.
So tell me, do you budget already? If not, why? Are you going to start?