Budgeting is like dieting… there’s no “one-plan-fits-all” program. Just because Keto works great for your uncle Jim doesn’t mean it’s going to be right for your lifestyle and nutritional needs! Keto, vegan, pescatarian, paleo, Weight Watchers, Noom… the list of popular diet plans out there these days goes on and on and on! The amount of choice you have when it comes to customizing a budget just for you is even greater.
Budgets should be like fingerprints – completely unique to our individual selves, lives, and situations. No two people have the exact same income, expenses, and money ambitions. When it comes to a budget that you’re going to stick to, it needs to work for your lifestyle and priorities! Having a realistic budget is a fast-track ticket to financial freedom and even F.I.R.E. (Financial Independence Retire Early). In this article, we’re going to talk about the things you can do to create a budget that works for you which ultimately leads to Living a Life You Love!
For so many years, I would create budgets for myself that were too restrictive. Setting my grocery budget to $30 a week. Setting my miscellaneous spending budget to $10 a week. Month after month, I’d find myself utterly disappointed and feeling like a failure for “going over budget” in all the categories. My shame and regret would send me spiraling into a spending frenzy. I’m sure you’re familiar with it – I’ve already broken the budget this week, I might as well spend a little more. Oh, I’ll start again next month.
However, in the last couple of years, I decided to stop lying to myself. I realized that there’s no way I’m ever going to have a healthy relationship with money and budgeting until I find a way to make it work for me! I FIRED the OLD ME, the one who was so hard on herself that she cried if she spent a penny over $30 on groceries one week, and I started focusing on the NEW ME, the one who felt happy with her budget. I sat down and created realistic, attainable budget amounts for groceries, takeout, and “fun money” each week. Can you guess what happened? I started underspending in every single category. It felt like a miracle! When I stepped back and gave permission to spend more, I didn’t feel like I needed to. I was spending less than I ever did on the super restrictive budget plans. There’s something about human nature that hates to feel scarcity. It makes us crazy and irrational! Creating a feeling of abundance can help us feel content and result in fewer impulse purchases. If you’re having a hard time staying within your budget, try giving yourself a little more wiggle room in those categories that you struggle with.
Nothing will derail your budget faster than an unplanned expense. Whether you’re paying off debt, saving for a home or other purchase, or simply stacking cash for savings and retirement, encountering an unplanned expense can really throw your budget off the rails. Let me tell you a story.
Every year, I take my dog to the vet for his yearly heartworm and arthritis checkups. Every year, that checkup costs the same $200. Every year for five years, that $200 expense completely wrecked my budget and sent me into a panicked frenzy of confusion and overspending due to a lack of planning.
I’d dip into my savings or emergency account to cover the costs… And then I’d find more excuses to dip into those funds. You know how it goes, once you break the seal, it’s hard to stop reaching in. That’s why it’s so utterly important to plan for every single thing that could possibly cost you money. Sure, some things can’t be planned for, and that’s why we have emergency funds, but with a little thought and planning, those can be extremely rare! If this sounds familiar to you, I urge you to sit down and think. Think through each week, each month, each season of the year. Jot down any expenses that come to mind. Car maintenance and repairs, gift-giving, pet expenses, your own medical expenses (copays, prescriptions, etc.), even the $20 you’re bound to give to the Good Samaritan volunteer outside your grocery store in mid-December. Really think about your patterns and habits, and make a plan! Nowadays, I put aside $20 a month into a “Pet Fund”, and I have that $200 appointment cost and more ready to go each year for the vet’s office.
Deeply understanding why budgeting is important is crucial to sticking to one. If you simply set spending limits willy nilly with no goals or motivating ideas, what’s the point? For me, the reason I budget is to be able to stack some cash so that I can eventually have autonomy over when I work, what I do for work, and how much I work. I want to Love the Life I Live, and I don’t love working full time, so I follow a budget that allows me to save enough money to “retire” early!
Everyone’s “why” is going to be a little different, and it may change as the months and years go on. A few years ago, my reason for budgeting was to get out of consumer debt! I have a friend who budgets so that she can travel the world – she goes on trips all over the place every single year. Another friend of mine budgets so he can contribute to charities that touch his heart. Reach deep and figure out why budgeting is important in your life.
What’s the OLD YOU that you want to FIRE? Is it the you that’s in debt, the you that has to work full time, the you that can’t afford to travel or give to charities…? What’s the NEW YOU that budgeting could help you realize? Is it the you who ditches the 9-5 years sooner than everyone else to pursue a life of purpose, the you that can visit multiple new places every year, the you that can contribute enough to make a difference? Whatever it is, figure it out! I promise that if you have a “why” to lean on when budgeting gets tough, you’re a million times more likely to stay on track.
Budgeting doesn’t have to be boring! There’s no need to feel constricted, limited, or tortured when it comes to spending your own money. This point goes hand in hand with finding your “why”. Once you know what it is that motivates you to save some money, you should instantly have an easier time doing it. But you can still find ways to spice it up and make it a little more enjoyable!
I personally love budgeting, but I wasn’t always this way. Just a handful of years ago, getting me to make a plan for my money was like pulling teeth. I refused to sit down and review my spending habits, income, and expenses. I didn’t have any goals for myself. And just the word “budget” made me scrunch my face like something smelled bad. That OLD ME died the day I identified my reason for saving money.
The NEW ME has a driving force behind me that makes budgeting more enjoyable. Instead of a forced practice to make me miserable by keeping me from spending money, I look at budgeting as a tool to help me achieve the things I truly want in life! It’s a means to my dream end – a Life That I Truly Love. However, following the same budget week in and week out can get a little monotonous. That’s where the fun comes in.
There are so many fun ways to make your budget more fun. One of my favorite ways to spice it up is to implement “no-buy” weeks or months. It’s self-explanatory, but a no-buy month is a month in which you try to buy nothing (aside from essentials like food, paying utilities and bills, gas for your car, etc.). Every time I do a no-buy challenge, I learn so much about my spending habits. Not to mention, I find tons of new and free things to do for fun! Plus, I save quite a bit of extra cash to help me reach my financial goals faster!
Another fun thing I do to spice up my budget is to do “make money” challenges. For example, this week, I challenged myself to make $20. In seven days, I had to come up with a way to make the extra cash. There are so many ways to make a little extra cash in a pinch. Here are a few I use a lot:
One other fun way to make budgeting fun is to try an “eat the house down” challenge! Set a period of time for which you’re not allowed to grocery shop or get takeout. You make meals from only what you have on hand. You’ll save money in food costs, and you’ll lower your food waste as you eat some of the things you’ve left sitting around before they expire.
Usually, I can make it anywhere from 3 days to a week from what’s on hand in the pantry before needing to go to the store to grab some things. If you look through all your food before starting this challenge, you can grab the handful of items you may need to make the meals you have in mind (milk, eggs, etc.). Even if you must make a small store trip, you’ll most likely spend way less than you would on a full week’s grocery haul.
No-buy challenges, make money challenges, and eat the house down challenges are just three ways that I’ve personally used to make budgeting less boring! Try them for yourself or come up with your own little games to keep yourself from getting bored with your budget.
Even if you set realistic budget amounts, plan for everything, find your “why”, and have fun with it, your budget could still flop if you don’t take the time to adjust it when necessary. For most of us, our lives are always changing and evolving, and so are our spending needs. For example, when I finally paid off all my debt, my budget changed a little to match my new goals. Or, when I moved in with my partner, my budget for groceries changed because we were buying them together and splitting the cost! Hopefully, you’re always working on FIRING the OLD YOU and the habits that no longer serve you and are constantly working on shaping and improving the NEW YOU!
There are a billion reasons your life and needs could change, so the best way to be sure your budget always reflects your current circumstances is to keep close tabs on it! Personally, I pick a day and time each week to sit down and reflect on the week that’s passed. What did I spend money on? Did I overspend? Underspend? Should I adjust anything in my budget? Is there any purchase coming up that I need to start saving or planning for? You get it! My weekly check-ins keep me sane, keep my budget top of mind, and allow me to constantly adjust it when needed.
So, there you have it! My five best tips for creating a budget that you’ll actually stick to. To review:
Try these ideas out for yourself and see if budgeting gets any easier. I know it did for me! I’ve been able to FIRE the OLD MEwho could never stick to a plan and was always feeling guilty or anxious about money, and I’m so happy with the NEW ME who’s coming in under-budget each week, reaching financial goals, and Living a Life I Love! Will you join me?