It really doesn’t matter if you make $600,000 a year or $60,000 a year- a budget is a necessity! I know money can be a big life stressor, especially if it always seems to be in short supply at your house. If you are anything like me (or how I used to be), you avoid budgeting because it causes anxiety and sends you into a downward worry-spiral. The good news is, it’s pretty easy to do, and can help improve many different areas of your life! Here are my top five reasons why YOU need to start a budget today!
Now, just for reference- my family follows the Dave Ramsey Baby Step program. We are just finishing up Baby Step Two (paying off all our debt minus our house) and we do not use credit cards for anything- even if you try and convince me that the rewards are excellent. I am in no way affiliated with Ramsey Solutions, I just really like his teachings and they have proven effective for our family! To read more about the Baby Steps, check out his book The Total Money Makeover, or even better, listen to his Podcast!
1. You get to be in charge of your money, instead of your money being in charge of you. Have you ever uttered the sentence “I just don’t know where all my money goes every month”. I know I did! To be honest, I always felt broke before I started telling my money what to do. And to be frank, we made too much money to feel broke at the end of the month!
It wasn’t until I started to budget that I realized all my little trips to Target or Dunkin Donuts added up fast. I know I am not the only one who used to wander through Target and end up with a $100+ receipt! I still budget in some “fun money” for myself and Colin, but we have really reigned it in. Now we budget for $50 each a month to do as we please with. If I want to go to Target and blow my $50 I totally can without feeling guilty. If Colin wants to go out with his buddies for a few beers, he knows he has a $50 cap. You guys- budgeting has saved us from SO MANY ARGUMENTS (see reason #5 for more info).
To some $50 dollars a month in fun money may seem really low (it does to me too some months!). But remember we are on Baby Step Two, so our main goal right now is to throw as much money at our debt as possible. Some hardcore Dave Ramsey fans may turn their nose up at our budgeted $100 a month fun money, and I get that, but we needed to budget a little money in to support our sanity!
PS: we also have a budget line titled “Alcohol” in the summer months, because who doesn’t love a few extra cocktails on warm summer nights?! You can literally budget for anything, as long as you can afford it of course.
2. It can help you achieve your goals. This can be a small goal like keeping the monthly grocery bill under $400 or a big goal like paying off debt. Whatever the financial goal is, budgeting is your ticket to achieving that goal. Currently, our family’s biggest goal is to finish paying off all of our debt. There is absolutely no way we would have been able to do this had I not started budgeting! Have you ever made a New Years Resolution only to completely forget about it a few months later?! I know I am guilty of that, and I am pretty sure the same thing would have happened to my Debt Free Goal had I not really hunkered down and started to get serious with budgeting.
The EveryDollar app makes budgeting easy, and it helps you clearly lay out your goals. For us personally, we wanted to pay off our debt as quickly as possibly- so we set a monetary amount that we would throw at debt each month, and that became a budget line item. Seeing our debt amount get smaller and smaller each month made us push harder and harder to make it disappear altogether!
3. Budgeting can help you be more prepared for those “yearly” expenses. I have one word for you- Christmas! Now that we have kiddos, Christmas suddenly got a whole lot more expensive. Instead of having December sneak up on us every year, we budget for it all year long. I created a separate savings account at our Credit Union and every paycheck we have X amount of dollars go right into that account before it even hits our checking account. That way, when December rolls around I feel very comfortable buying gifts for my family and friends without feeling stressed out or anxious.
We also budget for other yearly expenses, like annual vet visits for our pup Reggie, our biannual car insurance payments, and our car registrations. There is nothing worse than opening a bill in the mail and thinking “ugh I was not expecting that”, and then feeling stressed out or anxious the whole day! Now, when we get a bill in the mail I can say “ahh, yup, I budgeted for that already” and on I go with my day. For someone who suffers from anxiety, this has been a HUGE relief for me. Again, you are telling your money where to go each month, instead of being controlled by your money!
4. It holds you accountable. Remember above when I mentioned that we only budget ourselves $50 a month in fun money? And remember how I also said it was hard to stick to that? Well, that is true, but my budget also holds me accountable to stick to that number! The app that we use tracks everything we spend, so I know exactly how much I have already spent for the month, and how much I have left. When I get the urge to stroll around in TJ Maxx or Target, I look at the budget to see what I have left to spend. If it’s towards the end of the month and I have my full $50 left I might take a little trip to the store. But, if its the beginning of the month and I only have $20 left in that account I resist the urge and do something else that is FREE.
This sounds like such a basic concept, and it is…but we have gotten so far away from that mentality in our culture that it is scary. We live in a very material world, and we want it all! We are bombarded with ads all day long with messages telling us our lives would be better with said products. So of course it can be challenging to stick to a budget, but if you employ some basic tools (like a budgeting app, and a supportive spouse or partner) it can be much easier to set a budget and stick to it.
5. It can save your marriage. This one may sound a bit dramatic…but it really can! Money disagreements are one of the top ten reasons American’s get divorced in today’s society. I very specifically remember going through premarital counseling the summer before my husband and I got married, and our pastor asked us to each write down how much money we felt comfortable with our spouse spending before being consulted. While it was a great question, that was as far as it went. My husband knew that it was strongly advisable that he not spend more than $100 without consulting with me first, but that was literally the only thing we had communicated to each other regarding money and budgeting. We never really had big disagreements over money, but we were also never on the same page.
Budgeting=communication! When we started to budget, we started to actually communicate about our finances. Prior to our financial journey, I took care of 100% of our finances. I paid all the bills, managed the bank accounts and monitored our spending- which was exhausting for me! When we finally sat down to budget, Colin couldn’t even tell me how much the car payment was, or what we paid in electric each month (cue in the “I’m the only one that does anything around here” statement that almost every wife has said at some point in the marriage!).
Setting a budget together- and then holding each other accountable- helped us communicate more effectively, see eye to eye on our finances, while evening the responsibility load. I personally love the EveryDollar App for budgeting, because you can link other people into the household so you can all see the same budget. That way if Colin is doing the grocery shopping for the week, he can quick check on the app before going in to see how much we have left in that category for the month (no more coming home with more snacks than a teenage boy haha).
So are you convinced yet?! I hope so! There are SO many budgeting apps and tools out there to pick from. Check out a few options and pick what works best for you and your family. I originally tried just making a spreadsheet on Microsoft Excel, but I quickly realized that would just not suffice. I wrote numbers down each month, but there was nooooo way I was saving every receipt to enter in later. Then I tried the App called Mint by Intuit. It wasn’t bad, and it was free which was nice, but it wasn’t my favorite. Like I stated above, the Everydollar app is hands down my favorite. You can try it free for 14 days if you sign up for Ramsey+.
If you have budgeting questions, or you just don’t know where to start, shoot me a message below! I would love to help.
Happy budgeting everyone!