Budgeting Blues

Budgeting is an important part of long-term success in our society. There are many different ways to go about it, and people handle it very differently. Some just try and save where they can, and if that works out to be extra savings at the end of the month that’s great. Others review their expenses with a fine-tooth comb and minimize costs whenever possible. There isn’t a right or wrong way to do it, but there are certainly things you can do to make the process easier.

1. Make a List- Create a list of all your recurring bills each month. Everything from utilities to subscriptions like Netflix are good to take note of. Having all these costs written down will help you to allocate the rest of your funds for the month. It may be helpful to have 2 different lists or 1 color coded list, of fixed recurring costs vs variable recurring costs to see where you stand.
2. Savings Opportunities- Ideally, you’d want to go through your budget at least a couple times each year to evaluate where pennies can be pinched. That could be anything from cutting back on the number of streaming services, to eating out less each week. Once you have your list created as suggested above, this process should be fairly straightforward. It’s also a good idea to keep track of the things you plan to cut back on to see what kinds of adjustments you’ve made throughout the year.
3. Surprises- Not all surprises are good. In fact, in some cases they are just plain awful. That could be your car breaking down, incidental medical expenses, or any number of other occurrences that could drain your hard-earned savings. While it just isn’t possible to plan for every eventuality, the larger your rainy-day fund the better. Credit cards have their time and place, but you don’t want to have to rely on them every time something comes up.
4. Prioritize- Take that budget list that you have and really dial in which costs are necessities and which are frills. You don’t have to cut back on everything that isn’t absolutely necessary, but knowing ahead of time where you can save money will help you out in a pinch. Then actually write down your reasoning and goals for budgeting, even if it’s just as simple as to save more money. It’s good to have tangible goals when trying to make these changes.

If there’s anything we’ve learned from our own budgeting struggles, it’s that if you prepare for the worst even when things are going well, you’ll be ready to ride whatever storm comes your way. There are of course always going to be things out of your control, and you know what they say about best laid plans. But knowing how your finances break down is helpful wherever you are in your financial path, and we hope the more tangible approach to this constant issue will make life run a little more smoothly.