What do you think when you heard the word “budget”?
For a lot of us, it looks like a really sad movie of “being responsible” and “having it together” while not having any fun at all.
One of the reasons as to why some folks don’t like the idea of budgeting is because it always gives off the impression that you should be miserable and strict. If that was the case, it would make total sense. After all, who wants to be restricted by a boring budget?
Reality is, though, you have been going about budgeting wrong all this time! If anything budgeting is what should set you free. Yes, you read that right. While yes, it does take a certain amount of discipline to stick to your budget, I have personally found that having a budget gives me the freedom of knowing where my money goes, how I choose to spend it (and on what), as well as being able to keep track of my expenses in the long term.
With that said, here are a few things I’ve learned about budgeting along the way:
- Pay Yourself First. You probably have heard this a thousand times already, but it’s true! When it comes to budgeting, set aside money every month for it to go to your savings account. Remember that this is money you earned and while saving some of it might seem boring–especially when there are much more fun things to do–think of it as an investment in future you!
- Don’t Quit Anything Cold Turkey. Like to go out? Budget for it. Enjoy restaurants? Budget for it. I can’t stress enough why it’s so important that you allocate funds for things you like to do. Often, when people quit spending money on certain things all of the sudden, this impulse tends to creep back and be stronger than it was before. So, instead of having all this money to your disposal, you will find you are spending more money than before you quit. Treat yourself! But remember: the amount you allocate should always be proportional to the money you make/have.
- Yes, Paying Down Debt is Part of Your Budget. For the past couple of months my boyfriend and I had been worried about our budgeting, since it seemed a bit high. Turns out we forgot that we had incorporated paying down our debt–from buying furniture–into our monthly budget. Without even thinking about it, we have been aggressively paying down our debt and, in a few short months, we will be debt free! Incorporating your debt into your budget has made sure that not only are we making the highest payment we can, but also that the money is out of our hands before we can spend it (unnecessarily) on something else.
- Set some S.M.A.R.T. Goals. Why are you budgeting in the first place? What is motivating you to? It is good to have a short- and long-term objective for our personal financing. The reason why is that we tend to be more proactive when working against deadlines–remember trying to finish a paper the night before it’s due? When no deadlines or goals are set, you might as well be working towards a big cloud of nothing. Well, not necessarily nothing, but a big question mark as to why exactly is it that you’re doing this. For example, I have a goals relating to purchasing a home, a new car–which would be long-term. Short-term goals look more like vacation, entertainment, or other leisure items.
- You Won’t be Perfect Every Month and That’s Okay. Let me be very clear for a minute: you are not a money bot. Our nature as humans and the nature of the system we live in almost guarantees we will not be perfect every month with our spending. There are some months where I don’t spend anything on my preferred leisure items (makeup…so much makeup…) and there are other months when I am a bit out of control. And there are times where I have extra expenses that are not part of my month to month–such as a medical bill for some lab work, or traveling for a friend’s wedding. These are things we sometimes do not foresee. This is why is so important to not get (too) worked up about you not following your budget to a T. You’re human and imperfect. Also, life happens.
What scares you about budgeting?
Tags: budget, budgeting, Money
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