November 20, 2014

The Dreaded “B” Word: Where Do I Start? (31 Days to More with Less)

Oct20

Photobucket
For me, creating a budget is pretty similar to fingers on a chalkboard, my daughter “serenading” me over and over in my ear, spending money on underwear (what a waste), committing to workout with the “30 Day Shred” for….30 days and, well, you get the idea. Have I clearly communicated that creating a budget is not on my list of favorite things to do on a fabulous fall day? Just making that clear, so you have no doubt.

With that being declared, figuring out where your dollars go on a monthly basis is key to not only financial peace of mind, but financial success, whether you like it or not. If you don’t like it, and choose to ignore the time it takes to do this critical step, then you’re basically disposing of income. No,  I don’t mean you have disposable income, that is a great thing. I mean you are literally disposing of income. Yes, throwing it away…and you don’t even realize it. Creating your budget, and learning to make it work for you, will  give you freedom

Budgeting is about seeing and understanding where all your dollars are going, no matter what your annual income. Tracking our spending is critical, and will be our first step, but budgeting is about so much more than that. It’s about telling your dollars where to go and making them live up to that goal. It’s not just wondering if there’s going to be any cash left over that month, but determining what your financial goals are, giving each dollar a job, and then watching those dollars perform their task.  It’s about creating a plan that works for your financial situation, and empowering yourself that you have a say with what happens, even if you’re making ends meet. It’s about committing yourself to no more “I’ll save it for another day,” because for many, that’s where the financial crisis began. Budgeting is about kicking the notion that “I don’t have time to work on a budget,” where it counts and accepting the truth that “You don’t have time NOT to.”

Oh my! I’m climbing on my soap box and must quickly scurry down. Friends, it’s because I know the emotional stress that money puts on relationships, marriages, friendships, work…life, that I care so much. I want to encourage you down a path that will help you manage your money, and while clipping coupons and shopping at thrift shops are means to cut expenses, if you don’t dig in and dissect your overall budget first, those things won’t make a dent in your long term outcome.

In Stephen Covey’s book, “The Seven Habits of Highly Effective People” he states that one of the habits of highly effective people is that they begin with the end in mind.  I often quote my own dad who drilled into us “nothing becomes dynamic, until it becomes specific.” (Why does that always require “Type A” kind of work that this “Type Z” person can’t stand?) Yet, I know that wandering aimlessly, especially in terms of finances, only leads to huge amounts of frustration.

First, we are going to start by setting a straight course, with practical and easy steps. We’ll walk through this with plain, Jen- style English.  None of this,” I have no idea what you’re talking about finance mumbo-jumbo talk.”

Do you care to join me?

(Maybe I should rephrase that. You probably don’t want to join me, but this may be one of those situations where you need to join me.) ;)


Click here for my previous “31 Days to More with Less” posts, and visit my friends joining me on this journey.


Comments

  1. Yes, I need to join you; please send anesthesia for the pain that’s coming! :)

    [Reply]

  2. So the hubby and I have made the budget, but we’re getting stuck on the following it part. I’m looking forward to any suggestions! Thanks!

    http://simplyweekends.blogspot.com

    [Reply]

  3. We have been on a budget since the day we were married and see it as freedom rather than stifling. We began using the Larry Burkett method of envelopes. What’s nice is that when the bills come, the money’s there. we love it.

    [Reply]

  4. My husband and I sit down the first weekend of every new year and work out the budget for the year, and then we track our weekly expenses each and every week of the year. In spite of lay-offs, lower pay, weird and odd expenses, et cetera, we’ve never been in a state of mass panic that we wouldn’t be able to pay our bills because we know about how much they will be and know exactly what we can cut out or cut down on if some emergency does arise. Love your website (found via the nester) and your thrifty finds, but I have to say, I totally disagree with your viewpoint on budgets being disagreeable and unpleasant to do – it may not be fun (although we make saving money fun, so why shouldn’t the budget be too?) or your most favorite thing to do, but not everything in the world needs to be fun, entertaining or a favorite to do. It is however, one of the most satisfying, easiest things to do over time, and one of the best ways to relieve stress that I know of. And, being thrifty, budgeting couples is probably one of the best things you can ever do for your family and for yourselves as a couple.

    [Reply]

    Jens Reply:

    oh, I absolutely agree with you….and that is why I wrote in my post that it bring total financial peace of mind and freedom. And that even if we don’t want to do it, we need to. That will come out much more as I write about it, but for 90% of Americans, they see the word budget and immediately go into “turn off” mode, so II just felt it important for people to know that I really don’t like this, but think it’s so valuable that I do it anyhow. There’s this assumption by many that because I’m an “authority” on frugal living, cutting coupons, or am debt free or “xyz” that I just love it and want to do the hard stuff…nope, but find it so worth it , that we do it anyhow. It was just about making it seem approachable. :)
    And things like this come down to preference and personality types for so many. For me, creating the budget is something I do not enjoy at all. but have fun living it. Some people love the creating part, but hate the living by it part. My best friend loves to clean and organize, but hates being flexible. Me? I’m the complete opposite. Just different strokes for different folks. :)
    Thanks so much for your insight. Varying ideas is what makes blogging interesting.

    [Reply]

    Melissa Reply:

    @Jens, Well, I think you do a good job in the approachable department, nay, great! Maybe I’ve been doing it too long that I’ve lost touch with the disagreeable side of budgeting – I can’t imagine going back to a life of NOT knowing where my money goes each and every week, so major kudos to you for getting folks excited to save. mb

    [Reply]

  5. Yes, count me in. My husband is having trouble with the money talk.
    We have decided that we want a different life but it is hard to face the mistakes that we have made in the past. This Friday we are both off work and the budget is top priority.
    I would love any advice you have to offer.

    [Reply]

  6. Budgeting can be freeing! It lets you know where you are and relieves the stress of not knowing where you are :)

    This girl NEEDS boundaries!

    [Reply]

  7. We have had a budget for years and I honestly don’t know how we managed without one. I find myself not asking how much money we have in certain areas like food but asking if we are still under budget. I love knowing how much we have for certain things. I find it to be a game/challenge to stick to our grocery budget. It pains me to say that we used to “budget” $500 per month for groceries for the two of us. Now with 3 of us we actually budget only about $250 to include groceries, eating out and our stockpile money. We definitely go over it here and there but we move on and start again. I think a lot of people have the misconception that when you create a budget that you HAVE to do it to a tee and that changing it would be bad or failing; that’s how I felt in the beginning. What we have learned is that you need guidelines to follow but if you set them and they aren’t working then you have to change them or you are going to continue to fail, get frustrated and give up. For those that don’t like budgeting, I used to be one; it can be really frustrating to put in all the work of creating a budget to end up going over. For us, our budget changes multiple times per year. We lowered our grocery budget after I started shopping at Aldi and came up with the bright idea to try $40 per week. But we were still spending money adding to our stockpile which caused us to go over budget. We decided to allot $40 per month toward stockpiling items. That has really helped because we pull that money out in cash and when it’s gone it’s gone. We also do cash for our groceries. I found that once I started using cash for groceries I thought through my purchases and bought less impulse items. I think for those that haven’t been using a budget it would be good to have some flexibility because it may take a few months to get a budget set up and flowing smoothly.

    [Reply]

  8. This sounds great. We went through Financial Peace (Dave Ramsey) a little while back. We began funding our emergency fund and the air conditioning system went out. We were able to pay cash for a $5000 (middle of the line) unit. We were back to funding the emergency fund. Then my husband went through a 2 month period without pay. We were able to make it by using the emergency fund. And now….we are trying to build up the emergency fund again. This is our first month of income since depending on the emergency fund for the 2 month period. We are back at it.

    I look forward to reexamining our budget. It sure takes a heap of stress out of the most stressful money situations if you are trying to be prepared.

    Tasha

    [Reply]

  9. We’ve been working on establishing a written budget once again. We had one for years, and it was much easier to budget for/plan for when the children were smaller. I’ve been tracking our expenses through Mint for a year, and I never seem to anticipate the kids activity/ clothing/ dental etc. needs correctly. Fortunately the savings account is healthy. what I need to figure out is how much income I need to be working toward bringing in to keep it healthy and to pay down a couple of debts. Looking forward to joining in.

    [Reply]

  10. I was just talking to DH about our budget a few minutes ago – about how much we had saved for Christmas throughout the year. No wondering how the heck we are going to pay for gifts or trying to decide how much we can afford – we KNOW how much we have and how much we can spend (and hopefully we won’t use it all ;). It is an AMAZING feeling. I have found that finding a good program/process is key. I can honestly say that youneedabudget.com has been worth every single penny and more!! I am addicted to budgeting now and actually look forward to bills so I can fiddle with it some more – werid, huh?? The best part is, that for most people it will pay for itself in the first month just holding yourself accountable and knowing where your money is going. It’s like a food journal – if you know you have to write it down, the guilt might get to you first so you decide to do without. I wouldn’t be sitting in our newly built house (moved in 2 months ago) if it weren’t for our budget – it makes THAT much of a difference!! Instead I would be sniffling and sneezing in our moldy nasty old house. BIG difference in day to day life, just from keeping track of a few dollars here and there. Oh, and DH and I are 26 and 27 years old with a RETIREMENT goal in mind – how awesome is that!?!?!

    [Reply]

    Jens Reply:

    @Renee, that is awesome and too funny because one of my upcoming posts is title, Give ever dollar a job (and I had never seen that site before). I’m going to recommend Mint.com because it’s free, but if it’s something that works for you….it IS worth every penny.

    [Reply]

  11. Xavesmama says:

    We have had a budget for years, our problem is sticking to it! The bills always get paid, its our savings that suffers. It is just one of those things I know I can do better, yet somehow never manage to.

    [Reply]

  12. We had a budget when we first were married. We used the envelope system, too. Then over the last 30 years I moved to a more written budget with bills to be paid noted on a calendar, and I have kept all the calendars so I can see the changes over time. Then, last year my husband decided he needed to do the bills and the budget has gone out the window. He doesn’t even record payments as he makes them! I’m still doing the frugal things I have always done but I miss the reassurance of the budget. Maybe by doing this I will be able to convince my ACCOUNTANT (see the irony) husband to either budget or let me take the bills over again . Either way, I’m in.

    [Reply]

  13. You are right…I don’t want to join you, but I need to…looking forward (well, not really but I’ll pretend to) to the journey…

    [Reply]

  14. My word!
    We came home from our financial planning appointment tonight and I knew that I HAD to begin to budget….imagine my glee when I clicked on your website from the Nester and saw this post.

    I have joined Mint.com, obtained a credit card with a (MUCH) lower interest rate, transferred my balance at 0% and am on my way to figuring out where my money is going and how I can manage it better.

    THANK YOU!!!!

    [Reply]

  15. I’m looking forward to this too (not really!) We’ve been married for almost 13 years and I still haven’t been able to bring myself to creating a budget. I know, I know, shame on me! It’s just something I dread taking the time to do and making it all work. However, I know that we need to! My husbands company keeps down-sizing so we have the possiblity of a lay-off in our future and my part-time job also has the possibility of becoming non existent due to budget cuts. I know it’s more important than ever to really get our emergency fund as large as possible. Great timing and thank you!

    [Reply]

Share Your Thoughts

*

Current ye@r *