“Ugh, I hate to budget, it makes me feel so poor!”
This was a fellow mom at gymnastics the other day. We sat watching our kids jump and flip across the floor while we discussed our upcoming plans for spring break.
Mr. Bean and I are planning our first trip to Disneyland in April. I mentioned how we are trying really hard to cut down on our grocery and eating-out budget now so that we can afford to enjoy our trip more easily.
Of course, no one WANTS to need to budget. Ideally, we’d all be Jeff Bezos and able to afford to buy anything and everything we want! But for most of us, that is simply not the case.
But budgeting shouldn’t make you feel poor. Budgeting should actually offer more of a feeling of freedom.
Without a budget. your money can just run away from you to this bill or that purchase without you even having a say. With a budget, you tell each and every dollar exactly what you want it to do and how you want it to do it.
You get to be the boss!
So here are some tips and tricks for building a successful budget, for you:
How To Build A Successful Budget For You
When you sit down and write your first budget, don’t think of it as telling yourself no.
“No, you can’t have that cute new throw pillow.”
“No, you can’t eat at Jack-In-The-Box for the 3rd day in a row.”
“No, you can’t join your friends for girls’ night.”
That is not how a budget should work.
Creating a budget allows you to prioritize what means most to you in life and pass on the things that are just extras. What are the things you really want and need in life? Make adjustments in your budget to allow for those to happen.
“Instead of hitting the drive-thru 4 nights this week, we’ll use the crock pot for dinners so that we can afford to take your dad out for his birthday this weekend.”
“How about we both just make coffee at home for the next 3 months so that we can afford to stay at that nice hotel for your sister’s wedding?”
“The kids really want to take gymnastics, maybe we can find a less expensive phone plan.” (My son’s 2-hour gymnastics class is $120 a month. Our old AT&T phone plan was over $150 a month. Our new Tello Mobile plan is only $29 a month. Crazy how that works!)
Decide what really matters to you and prioritize it. Then ditch the fluff. You probably didn’t need those extra pillows/French fries anyways.
Start Your Budget Where You Are Now
Maybe you’re building a budget for the first time because you know you need to start saving for retirement.
You read somewhere (maybe here) that you can put $6,500 a year into a Roth IRA. “Let’s do that!”
That would require putting away $542 a month.
If you’ve been putting away money for a long time, that might be easy peasy. But if you’re currently living paycheck to paycheck wondering where all your money goes every month, that’s a crazy big goal. And setting it out of the blue is just setting yourself up for failure.
Personal finance is personal and your budget needs to be personal too.
When starting a budget, you need to start where you are now.
If you’re currently living paycheck to paycheck, start by looking at your recent month’s spending. (break out the debit and credit card statements) Where did it go? How much did you spend on housing? Groceries? Target? Eating out?
Did you spend a lot of it on “extras” like fast food, new clothes, or late-night Amazon binging?” Start figuring out how you can cut those out to find “extra” dollars to put towards savings and retirement.
If you legitimately spent every dollar on housing, groceries, and gas, it might be time to start looking at making some more drastic changes. It could be time to move, find roommates, increase your salary, or get a new job. No budget can save you if you are spending way too much on your basic needs or just plain not making enough money.
Figure out where you are now and start to make positive changes little by little. Eventually, you can easily max out that IRA.
Examine Past Spending to Decide How To Spend In the Future
When it comes to deciding what types of spending to ditch, take a hard look at your past spending habits.
What have you spent money on in the past that you may have regretted?
“That coat was super cute online but I already have 2 in the closet.”
“Happy hour was so much fun but I definitely shouldn’t have had 3 margaritas on top of the hot wings and mozzarella sticks.”
“Target definitely has the best price on my favorite pasta, but I really shouldn’t have stopped at the clearance rack on the way out. We don’t even own an air fryer, why did I get silicone air fryer liners?”
Look back at your past spending habits and take notice of the times you purchased things you really didn’t want or need. Then set up barriers for yourself to help prevent that unnecessary spending in the future.
Set Up Barriers
Unnecessary spending often happens out of habit or boredom. Add a little friction into the purchase to prevent overspending:
- Don’t save any credit cards on your phone or on websites. Making a purchase with one click makes it too easy to impulse buy. That extra step of having to walk out to the living room to get your credit card gives you a moment to decide if you really want it.
- Avoid scrolling on your phone when you’re bored, especially stores. The more opportunity you give yourself to see “cool/cute stuff” the more tempted you will be to simply “add to cart.” FOMO is real. Play a game or read an ebook instead. Your brain will thank you too. (Check Out Kindle on Amazon or the Libby App for free ebooks with a library card)
- Only do pick-up grocery shopping. Instead of walking through Target for spaghetti sauce and apples and then getting sidetracked with bath paint and funny coffee mugs, I use Target pickup to order just what I need and I never even have to get out of the car!
- Give yourself rules that fit your lifestyle: “I will only order one drink if I go to happy hour,” “I will wait 3 days before purchasing anything I put in my Amazon cart,” “I will only get coffee on Fridays”
Whatever you need to do to help yourself, set up barriers to make the decision to NOT purchase unnecessary things easier. Like with a diet, if you don’t have any cookies in the house, it’s a lot harder to binge eat cookies at 11 pm.
Find Budget Alternatives That Allow You To Enjoy Life
Starting a budget if you’ve never had one before can feel like a big bummer if you allow it to take all the fun out of life.
But by prioritizing what’s really important to you and putting your hard-earned dollars towards that, you should feel free. Make sure to actually give yourself alternatives to your old buying habits by finding more budget-friendly alternatives and enjoy life.
Maybe you love having brunch with your friends on Saturday mornings but the endless mimosas are really cramping your budget. Instead, grab some cheap champagne and a bottle of orange juice and find something free to do with those same friends. Go on a hike, picnic in the park, or take turns hosting brunch at your houses instead.
Maybe you and your spouse just NEED to get out of the house on Fridays. Grandma’s got the kids! But that $80 you normally spend on dinner could really be better used towards daycare during the week. Instead of dinner, do something crazy! Go on a walk! Make burritos at home and walk around the city checking out graffiti art. Or find a concert in the park. Use your imagination to still get out of the house and do something fun.
Having a budget is no reason to stop living. It’s a way to encourage you to be more creative and live life on your terms.
Prioritize What’s Best For You, Now and In Your Future
Two of the main reasons people feel the need to start a budget at Getting out of Debt and Saving for the Future.
Getting out of debt is a more obvious need. Collectors start calling. You get denied for new loans/cards. Bills become more than you can handle. Debt is a fire you can see now and know you need to put out.
Saving and investing for your future is a little bit harder to see. For many, your future self is a complete stranger. It’s some old person you’ve never met. Living life today, many people often assume “that old person me will figure something out.”
But surprise, that old person you is counting on the current you to take care of them. They’re old! They want to rest and enjoy life without worrying about money! Make sure to put some money away now so that future you doesn’t have to eat cat food.
Budget For Old Age You
The average age of retirement in America is 66. The average life span is between 75-80. The median savings for an American at age 66 is just $164,000 according to Synchrony Bank.
That means if you were to retire at 66 and live to the average age of 76, you’d have only $16,400 a year to live on, possibly a little bit more if social security is still around.
Do you think you could live comfortably on less than $20,000 a year? Probably not.
That is why it is so important to not only budget to take care of yourself now but also your future self.
I have seen my grandparents live to 99. Some are still kicking now at 85 with minimal slowing down. I want to make sure my future self is able to enjoy old age with grandkid cuddles and endless pasta at Olive Garden.
So I make sure that saving and investing for retirement are top priorities in our monthly budget. We make retirement savings automatic. It’s my favorite way to budget.
Wrap Up
Starting a new budget can be hard, especially if you’ve never done it before. But I hope you are able to see how freeing budgeting is. You decide where to put your dollars to work. Don’t let them just fly away, never to be seen.
Set priorities. Start where you are now. Decide how you want to spend in your life. And make sure to take care of your future self too.
What do you think? Is budgeting hard for you? Have you found tips or tricks to make budgeting easier in your life? Leave a comment below.
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Do you have a family finance question or topic recommendation? Email me at MrsBean@howmuchisthatintacos.com
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