Just hearing the word budget makes me want to groan out loud! Managing money and family finances is something I don't love to do...even though I love being organized. Go figure. I guess I was suppose to have an unlimited amount of money and somewhere along the way someone else got my share :) Oh well. I will make the best with what I have.
The question is how? How to make the best of my situation or your situation to become financially fit? I suggest a few rules to live by.
1. Live below your means. This means spend $20 less than you actually bring home, not $20 more. It is a simple concept yet often times difficult to put into action because there are so many things to spend our money on. This leads us to the next step.
2. Distinguish between your needs and wants. Once I accept that I do NOT need those cute new boots that are on sale at a killer price...a price I will NEvER find them at again, it will be easier for me to pass them by knowing that yes, I can actually survive without them (although it may not be easy:)
3. Set financial goals. Goals help me know that if I pass up the boots, that money will be going toward paying off a specific debt or maybe even towards a family vacation we are saving up for. Know where you are now financially and where you want to be in 5, 10 even 20 years from now. Plan with a purpose and then check in with yourself often to see how you are doing.
4. Set up a realistic budget you can live within and stick to it. Do not give in to temptations to spend more than you have budgeted. If you are married this needs to be done with your spouse. My husband and I sat down last night and put a new and improved budget into place. We were both happy with it and agreed to live within the parameters set. (I do have to admit that I quickly bought my boots before we did the budget...they were sooo cute!)
4. Find a money system that works for you. I admit it...with plastic I could spend money all day and not worry too much. I found that credit and debit cards are not really my friends. I use the money envelope system. Once the allotted cash is gone, it is gone until the next payday. Here are the envelopes I made to help me.
Today it is so easy to pay my bills with bill pay that I only needed to make myself 6 money envelopes for expenses other than those that I pay on-line. My categories are Food, Fun, Clothing, Sports, Misc, and Medical.
These envelopes I cut out using my silhouette machine. I found a tutorial here if you do not have access to a cutting machine. I chose cute paper and attached tags with the category on it. The money is then placed inside each envelope to be used as needed within that category.
I made a holder that is like a box that holds a deck of cards. This way I can keep the envelopes all together and with me in my purse without having money scattered all over my endless abyss (my purse).
I have found this is the best method for me to stay on track with my budget. My husband and I have found that often times we end up feeling like we have more money when we use this method.
**Update - I now use an on-line money envelope budgeting app that is worth it's weight in gold. The first month I was able to save several hundred dollars. The key is consistent and honest input. The app I chose is goodbudget. Give it a try, I bet you'll love it!