Contrary to popular belief, a budget is not a punishment. People think adhering to a budget is scary, a hassle, inconvenient, or that they’ll have to “live like they’re poor”, but in reality a budget is simply a tool that allows you to tell your money where to go. You get to tell your money where to go. Shouldn’t that be like, everyone’s goal?
A budget is a list of monthly, or weekly, or yearly expenses you can expect to go out of your checking account on a regular basis, compared to the income you can expect to come in. And the goal of said budget is not to spend more than you make. That’s not scary; that’s basic math. A budget can be ultra conservative, or it can allot $400/month for going to the movies. Doesn’t matter. Where your money goes isn’t the important part, it’s telling it where to go that matters.
I document every purchase we make, whether it’s on a credit card, a plasma debit card, or with cash. People think that’s too hard to keep up with, but I know from experience it’s a lot harder living paycheck to paycheck than it is tracking your money and having some leftover every month. I love that every dollar we make, save, and spend is accounted for and that everything we don’t need to live on is invested for our future. I don’t know about your future, but ours doesn’t involve working much and we’d like to get to that point as quickly, and as contentedly, as possible.
I love making budgets for other people; I love going over their expenses and income, and seeing their reactions when they realize how much more money they could have if they controlled it instead of letting it control them. In order to make an accurate budget, I suggest going over your bank and/or credit card statements for the last three months to get an average of what you’ve actually spent on groceries, utilities, entertainment, everything. This simple exercise scares the vast majority off immediately, and those who stick around are typically just horrified. If you’re curious as to why you can’t get ahead or out of debt, there’s only one way to find out: go back to see where you’ve been spending. And please let me know if it makes you cry, I just love that.
I know it can be scary thinking about making a lifestyle change, about facing your past mistakes, about adhering to a budget. It’s as scary as going on a new diet, or starting an exercise plan. I get mild anxiety every time I set out for a run, not because I’m scared of running, but because I’m afraid I’m going to fail. You’d think I was Usain Bolt training for the Olympics but no, I’m just trying to run three miles without stopping but it’s intimidating and hard, and real life gets in the way and I think I really just need more sleep and it’s not quite 50° and I think I saw a cloud and I definitely saw that tree move so it’s probably too windy and I’ll probably get sick so maybe I better just stay in and peruse Instagram instead. Humans can justify anything they put their minds to and that inherently makes us our own worst enemies. If you look for every excuse imaginable not to tell your money where to go, then obviously you’re never going to know where your money is going. Repeat after me: “A budget is not a punishment.” And it doesn’t have to be the end-all, be-all decision regarding your expenses. Hell, I’ve been known to make a new budget every week, much to Greg’s dismay (now I stick to every three months, then I average out the year).
If you’d like to know where your money is going, I’ve built these not-at-all-scary downloadable Excel spreadsheets with which you can dabble. I prefer working on Drive so I can have access to Sheets on my computer and my phone, both on- and offline. To convert these Excel sheets to Google Drive, go to your Drive homepage and click NEW, then Google Sheet. On that sheet go to File and click Import, then Upload, then select the file in your downloads. Easy peasy. The spreadsheets are pre-filled with some arbitrary numbers and expenses, so you’ll have to enter your own data but everything should update for you. I threw the last two in because this is how I keep track of our income and investments, and because they’re are a lot easier to update than going back over our pay stubs or retirement statements. I love knowing where money is going.
Monthly Budget & Expenses Track all your spending starting in January, and get a 3-month average for what you’ve spent on certain categories. Make a new budget accordingly.
Have fun and let me know if you have any questions, need any help, or if a spreadsheet doesn’t work for you. Or if you’d like to send me all your expenses so I can just do it for you, which I really love. You know what I always say: “If you don’t know where your money is going, you might as well be lighting it on fire.”