Wednesday, July 22, 2015

WILW: Budgeting


I have grown to love budgeting. That's not to say I don't get frustrated from time to time, but budgeting has given me an appreciation for money and what we spend our money on.  Learning how to budget has also given me a discipline that will (hopefully) pay off later in life. 

Budgeting is a constant work in progress. Incomes change, bills change. We're always learning how to adapt and make do with the current numbers in front of us. Tim and I, just in the 2 years we've been married, have lived on various budgets. Some stringent, others more lenient.   

Since we're newly accommodating to our latest situation, I thought I'd share some thoughts that have gotten us through those tight-budget times and helped us to budget successfully. 

Having an emergency fund is key. This can be a particularly hard one for recent grads paying student loans and potentially living paycheck to paycheck, but setting aside whatever you can into a fund for those "oh shit" moments is priceless. This may mean sacrificing a movie here or there or coffee runs, but it's a relief knowing that when an emergency hits, you won't have to resort to a credit card. 

It's all in the 'tude. You can look at budgeting one of two ways. Either 1) it's restricting and limiting your current lifestyle or 2) it's setting you up for an easier lifestyle later on. It's, at times, hard to stick my energy on the latter, but when I'm falling in a rut I remind myself that saying a small "no" to something today is setting me up to be able to say a big "yes" later on. 

Find your splurge. We have to be able to treat ourselves every now and then. Depriving ourselves of every little thing could easily lead to a "screw it, let's put it on the credit card." Maybe it's movies, maybe it's books, or games, or dinners. For Tim and I it's coffee. Going out for coffee is our us time. Maybe one day we'll be able to add dinner dates, a budget for a babysitter, etc. For now, we're happy with our coffee dates.

Find a system that works best for you. There's Dave Ramsey's envelope system, there are budgeting apps like EveryDollar and Mint. A system that may work for one situation may not work for another. Tim and I for a long while stuck to the cash system and it helped us significantly in saving for Ella's arrival, but when Tim started working a lot more hours it became harder to manage. We then switched over to using apps as we both could stay on top of our budget.

Tackle budgeting as a team. Usually one person handles the finances -- the spreadsheets, the bills, the tracking -- and that's great.  Depending on your current scenario though, it can be difficult to manage money alone with sometimes burdensome numbers looking back at you.  If you sit down and simply talk your budget out together, it helps to keep your situation in perspective and equips you to be able to help each other stay on track.

Have tangible goals and revisit progress often.  This one has helped us in the short time we've been married.  If you're sitting on a mountain of debt, it's important to know where you want and need your money to go.  It can seem insurmountable to achieve even little goals when we're constantly getting more statements in the mail.  By setting tangible goals, it gives us focus and ultimately momentum to reaching financial freedom.  List goals by importance and urgency and allocate any extra money earned (through selling items, bonuses, or side jobs) to the fund that helps you achieve your goal.

Budgeting has been a constant work in progress since Tim and I got married.  We've had ups and downs, and I'm sure more highs and lows will come our way.  We've learned, though, that these few pointers aid us well in staying focused and not veer from our budget or goals.  Everyone's current situation is different, if you have any budgeting insights or tips, I'd love to hear them!

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