This week Dave Ramsey talked about the importance of budgeting. I’m not going to lie–budgeting is NOT my favorite thing to do. Especially when you start out, budgeting is a trial-and-error process. Here are a few tips I have found to make budgeting less painful:
1. Make a list of all your set bills first. My rent does not change from month to month and I am on a budget plan for most of my utilities. The same amount get withdrawn the same day every month.
2. I have a set amount every month I put into a separate savings account. I take my annual fees (Sam’s Club, AAA, car insurance, renter’s insurance, hairdresser, vet bills, etc.) add them up and divide by 12. That way I have amount right there when I need it and I don’t have to stress about coming up with $300 when the insurance bill is due. My “no surprises” fund helps me sleep a little easier at night.
3. I withdraw $100-$150 in cash a week. This is for gas, groceries and entertainment. It does get tricky because there is stuff I’d like to do: go out with friends, buy cute baubles at Target or whatever. But studies time and again have shown we actually spend less when we pay with cash, so it really does help to use cash!
4. Irregular incidentals come up, like doctor co-pays and presents for family members. I try to have a little set aside for that.
5. Every spare penny I get from my second job, I hurl at my car debt. My goal is to double up my car payments and pay my car off by December.
6. I have a subscription to Dave Ramsey’s Total Money Makeover software online. Unfortunately I have been lazy and not keeping up on entering in the data. That is my fault and I am being more intentional about saving receipts to enter in.
7. My budget is fairly simple because I do not have a mortgage payment or anything like that. What works for me will not necessarily work for everyone else. But for this season of my life, it suits me quite well.
Here is why it is important to budget. Rabbi Daniel Lapin, in his book Thou Shalt Prosper, a dollar bill is a certificate of appreciation. We work so hard at our jobs and give the best part of ourselves at work. We scrimp, we save and we dream for a better life. So why shouldn’t we tell our money where to go and what to do before we even spend it?
Just something to think about as I get back on the budgeting bandwagon and watch what I spend.