How 30 Minutes A Month Can Save You Hundreds a Year
It literally takes only about 30 minutes once a month to plan out a budget. A budget helps you know exactly where your money is going and it puts a limit on how much you spend on certain items. Since my husband and I started budgeting it has saved us money, time, and maybe even our marriage!
What Exactly is Budgeting?
My husband and I made our first budget when we were planning our wedding. It took us HOURS! We had no idea what we were doing and literally had no idea what was going on with the money we had.
On that note, it may take longer than 30 minutes when you are planning your first budget, but it gets easier!
When we took Financial Peace University by Dave Ramsey, a budget made so much more sense than when we tried to make our first budget.
We learned that a budget was where we had to write down how we were spending our money and set limits for ourselves so that we didn’t break the bank account. It reduced so much stress!
We no longer had to worry if we have money for the water bill that month because it was all in the budget. We even stopped checking the bank account every day!
Why Should You Start a Budget?
If you spend money, you should have a budget! Period.
I didn’t realize how hard it was to survive not knowing exactly where my money was going or if I would be able to pay a bill in a week until I made a budget.
1. It reduces stress
We knew where our money was going so we didn’t need to worry if we would have enough money to spend for a bill or for groceries. I will never have to say “Babe! We don’t have enough money to buy groceries” ever again.
2. It saves money
Since we knew where our money was going, we were able to stop spending money on unnecessary things and put it towards bigger purchases that we wanted to make in the future or in savings. “What?! We’re spending almost $200 a month on restaurants? Let’s go out less and put the rest in savings.”
3. It keeps you organized
If you are like me, you are not very organized with your finances. You just swipe a card and then forget about it. But when you need to know how much you spent on that purchase it’s a mess! You don’t know how much you spent on it! We knew exactly how much money we had to spend and what we were going to spend it on! We could also go back and see how much we spent and where we could improve (goes back to saving money).
4. It helps you save for big purchases or taxes
My husband is self employed so this was a great way to save back money little by little that we would have to pay for taxes!
It’s pretty simple really…. YOU NEED A BUDGET!
How Do You Start a Budget?
There are many online budgeting systems out there that you can choose from. My husband and I personally use everydollar from Dave Ramsey (yes… we like Dave). I highly recommend it!
Its free and the best budgeting tool out there in my opinion! Plus they have an iPhone app so you can take it with you when you go out! How cool is that?!
It’s also customizable to your own needs. So it will have categories already filled in to get you started, but you can add your own if you want. We wanted to save up to buy half of a cow so we had a meat category one time. True story.
Every Dollar is made for Dave Ramsey’s zero based budget plan. So your goal is to assign every dollar (get it now?) to a category. This doesn’t mean you spend it all. You can save it too!
So I made some examples of what Every Dollar looks like.
Here you can see that you add your income at the top. Then when you fill out the rest of the budget, it will tell you how much money you have left to budget, if you are over budget, or it you have an every dollar budget (you assigned every dollar to a category).
This is an example of some of the categorizes we use (totally made up numbers):
There are many more categories (like groceries and gas) but you get the idea! It is very organized, clean, and easy to use! Plus you can always add more categories that fit your needs. Like that Dodge Challenger of your dreams!
Keep in mind that the goal is to make you budget look like this so that you know where all you money is going.
There are also free printable budgets out there if you would rather do it on paper, but I love having one online that calculates everything for me and that I can take on the go!
What Are Some Problems you Might Run Into?
Starting out is hard. It can take a few months to get used to it so expect that! You might run off track a little bit and forget to write an expense down. It’s okay! Don’t give up. Here are some other problems that we ran into (and still do) when we started budgeting.
1. Saying “Sorry.. It’s not in the budget right now.”
This is tough! We had people get really upset with us sometimes when we just couldn’t spend the money. But we stuck to it! It’s also extra hard when you really want to spend the money, but you know you have a budget to follow. Dave Ramsey says:
“If you want to live like no one else, you have to live like no one else”
Do you want to live like no one else in the future (not living paycheck to paycheck)? Then you have to live like no one else now (not buying everything you want).
How did we overcome this? Set aside 50 a month for outings and get togethers with friends and family. Then when someone asks to go out you can say, “sure! It’s in the budget!”
2. Forgetting about the budget or ignoring it
It’s easy to say, “I’ll update the budget tomorrow” and then you forget about it and then it gets unorganized and you don’t know how much money you have, where it’s going or if you can pay your rent. Ahhh!
How did we overcome this? We actually do this a lot…. If we have a big trip or event going, we tend to just put the budget aside and tell ourselves that we will get back on track in a few days. That few days usually turns into a month or two. This causes tons of stress in our marriage so please please please try to stay committed. If you get off track just start your budget over with the money you have in the bank and whatever paychecks you will be getting that month. Try not to get lazy (like us).
3. You get paid twice a month instead of the first of the month
We ran into this problem really quick!
We would set up our budget for the month and then realize that we didn’t have as much money as we thought we did because my husband gets paid every two weeks instead of at the beginning of the month.
So for example (these are made up numbers) we would earn $3,000 for the month and put that as our earnings in the budget. But then we would only have $1,500 in the bank and be going off of the $3,000 even if we had not been paid yet. Make sense?
How did we overcome this? We set up a budget for every 2 weeks instead of a month. We still had our month budget all set up, but we also split it in half for the month.
If you are confused I recommend taking a Financial Peace University class! Dave Ramsey goes very in depth in making a budget and why it is important to have one. It will change your life forever!
Are you ready to save some money and start a budget? What tools are you going to use? Leave your comments below!