and ramblings on everything in between
It’s a new year, so you know I have to ask this question…
When was the last time you looked at your budget?
You just cringed, didn’t you? And made a face at the computer screen. I saw it.
January is the perfect time to take a look at your budget, review any new expenses, add any new income, and ensure your monthly plan aligns with your 2015 financial goals. Who knows – this may be the year you become friends instead of enemies with your budget!
Living on a budget isn’t always fun, but I will argue that it’s a must for anyone who wants to control their spending, pay off debt, and maximize their earnings. My budget has been a crucial – if not the crucial – element in helping me to embrace a life of less debt and more simplicity.
Now that we’re in the new year, take a moment to look over your existing budget or sit down and create one. If you got a raise, add it in. If your health insurance went up, enter the new figure. Determine the exact amount of dollars that will be coming in and the exact amount of dollars that will be going out each month.
For newbie budgeters, start tracking your spending so you can get an idea of how much you spend in key areas, such as groceries, utilities, gas, and entertainment. Yes, I realize this is tedious. Yes, I realize you work hard for your money and deserve to spend it however you darn well please. It’s worth the time, trust me!
Don’t get frustrated if you say you want to spend $75 on groceries each week but keep going over no matter how hard you try. After awhile, you’ll start to recognize your spending habits, and I think it’s better to be honest about what you’re likely to spend in each area without cutting yourself so short that it’s not sustainable over the long haul.
One of my financial goals this year is to quit punishing my grocery budget when I go over in other areas of the budget (hence why this often happens to me). I need to be more realistic with variable expenses each month (i.e. oil changes, presents, and haircuts), which means I need to go back to the first step of tracking my spending so I know what extra expenses to plan for as the months roll by.
Let me leave you with this horror story. A friend recently told me she got a promotion in August and realized in December that HR never added her new rate of pay into the payroll system. (Jaw drop!) When she brought it to HR’s attention, they of course felt awful for the oversight and back-paid her for the difference, but you know what I think – shame on my friend for never looking at her pay stub and accounting for the raise in her budget!
Like Dave Ramsey says, you gotta tell your money where to go before it’s gone (or something along those lines…). Every penny you earn deserves a nice home somewhere in your budget. Use every last one of them to get you to where you want to be in 2015.
To minimalist living (on a budget) and beyond!