YOUR HOUSEHOLD BUDGET: UNCOVER THE SECRET SAUCE TO MAKE IT A SUCCESS
What I Have Learned in One Year Of Budgeting
Are you interested in creating a household budget? And being able to stick to it?
Have you created household budget worksheets one time after another, only to give up each time? Do you find yourself constantly struggling to plan and use a home budget to help you achieve your goals?
Okay, so I don’t have a debt to pay off. However, I constantly strive to cut down on expenses and save more money. Why? The answer is simple. I want to be able to provide better opportunities for my daughter. Besides, I also wish to have a comfortable lifestyle when I am no longer able to work.
Even with how much I love saving money and reducing my expenses, it is easy to lose track of my financial goals, lose my motivation and get sidetracked. I mean I love eating out. That cuppa from Starbucks, oh man – that is the undoing of keeping my monthly expenses under check! Just saying.
And in this, I can lose sight of the budget. The sight of financial goals get lost amidst the wafting aroma of coffee in the coffee shop. A classic case of why some people just can’t save.
I know I am not alone, either.
While many people choose to live a frugal life, it is not always easy to do so. Sticking to a budget and making it work requires motivation.
I made my first monthly budget in August 2018. I have been able to stick to my budget, more importantly, I have also been able to stick to the process of budgeting.
This month I completed 12 months of budgeting. One whole year! Not bad, eh?
What have I learned along the way? Here are my top tips for you to make a home budget that works for you.
- Lists that help you save money and stay organized.
- Transitioning from one month’s budget to the next: Steps you need to take.
- How to track your sinking funds (free printable sinking funds tracker template)
- Sinking fund: Saving for irregular expenses (a step-by-step guide)
Make Your Household Budget A Habit: Tips That Work & Keep You Motivated
1. Your Household Budget Will Evolve. Let it.
Have you created a monthly household budget only to find that it does not work? Do you find yourself failing and giving up each time you create a budget?
You are not going to get it right the first time. It is going to change. You will learn from your experience.
Your budgeting tools will evolve.
There are various home budgeting tools available in the market such as spreadsheets, free printable budget templates, expense trackers, budgeting apps and planners. Some of these are free, others available for a small fee. You can also create your own monthly household budget plan in a Google or Excel spreadsheet or in your planner.
I started off on a free version of budgeting app. I liked it – for the first few months.
What the app did was to help me gradually ease me into the budgeting mindset. As an example, the app gave me category suggestions when I was just starting off. This helped me avoid overwhelm and confusion. Rather than starting from scratch, I had a base case that I could adapt to my needs. I deleted the ones that did not apply to me and added a few of my own.
Using an app made it simple. All I needed to do was be regular in adding my expenses into the system. It did the calculations and threw up the reports. – I knew how much I had spent in each category, how much I had left to spend and what percentage of my spending was on what categories, say food, clothes for myself.
This worked well for me for the first few months, but then I discovered some limitations of these apps. I was no longer satisfied. There were some questions I did not have answers to – like what was my average monthly household expense on food? In addition, there were things I wanted differently. I wanted more than the apps were designed to provide.
You start understanding your budgeting needs and your money management style.
When you are budgeting you want to know the big picture. How are you doing overall? Is your overall wealth improving or declining, by how much?
Another thing was the plethora of different payment methods that you can choose from. These include cash, credit cards, debit cards, direct debits to your account, mobile payments and payment wallets. They sure can be overwhelming. I was not sure if I had missed out recording an expense.
So, I started making my own household budget worksheets in Google. These have evolved over time. Now I have created a monthly budget template that I duplicate into a new file to set up each month’s budget.
My monthly budget planner has changed and evolved with time and my requirements.
Don’t be scared if you don’t get something right the first time around. There is always the next month.
2. Start Small With Your Household Budget
Do you track your expenses?
Start with tracking your expenses. Once you have made a commitment to be disciplined about making changes with your money and finances, this is the first step to take.
To get your finances in order, you need to be aware of how you are doing right now. Expense tracking helps you do just that.
Tracking expenses helps you to understand where your money is going. It keeps you accountable.
Sometimes seeing real numbers is the wake-up call you need. It is like looking back and examining the decisions you made with your money.
Tracking your expenses will help you discover spending patterns, find areas where you think you are overspending, seasonal variations. This will help you to make a budget or a plan for your money. In other words, expense tracking will help you allocate amounts for your monthly bills and other fixed expenses, then for your variable spending on food, etc.
Don’t be afraid to plan for your dreams.
In a few months’ time, I had moved from merely tracking to thinking about what I wanted to do. I started to create sinking funds for some large, irregular expenses. My first sinking fund was set up to plan for Christmas. Since then I have a few more.
In addition, I created my own sinking fund trackers to plan for and know exactly how much I have saved for different objectives.
I am happy to share these free printable templates with you. You can download these from my free resource library and use them to track your sinking funds. Use the form below to get exclusive access to different resources.
So, from just tracking my expenses to creating my own budgeting worksheets and then using tools like sinking funds, my budget has come a long way.
In short, the idea is to start simple and then start building it based on your requirements.
This has helped me to stay motivated and consistent with my budgeting. I bet it will work for you too.
3. Budget For YOUR Priorities & Goals
The next step is to start thinking about your financial goals and priorities. Would you like to pay off your debts or save for a new car?
Early on in my financial journey, I realized that a budget needs to be a true reflection of your life and your style of living. It needs to be personal and true to YOU.
A budget is a tool that should bring organization to your finances and help you plan and save for YOUR financial goals. You decide where your money goes according to what is important for you. If paying off your debt makes you sleep better at night, then your budget should reflect that.
4. Be Real
What you spend on and how much you spend on any categories can not be artificially kept low. That is a sure shot recipe for disaster.
Luckily there are ways to reduce your expenses without impacting your lifestyle.
For instance, while making my first budget, I had little idea of how much I spent on each category. I used my estimates to allot spending limits for each category.
5. Revaluate and Reorganize
Looking back, I now know I was just swinging it. Luckily for me, I was not too far off from how much I spent.
I introduced new categories. So, in the second-month of budgeting, I had to make a short weekend trip to meet my daughter. A new category of expenses in my budget.
Since then travel and holidays are a permanent category in my monthly budgets. Also, I don’t travel each month. However, just that having the category gets me to plan my money if there is a trip coming up.
So, by planning to spend on travel, I was acknowledging my lifestyle and actual expenses. And as a result, being real about my real life and where my money actually goes.
Your budget should help you plan for a life YOU are proud of with the money YOU can afford.
6. Learn From Others
There is a plethora of information available to help you create your household budget.
A lot of people have heard of Dave Ramsey, the guru of budgeting and personal finance. His zero-based budgeting and cash envelope methods have been game changers for many families. I have learned so much from him and his principles.
It is such a blessing to have people Dave Ramsey share their experiences with us so we can manage our money better.
7. Consistency Is Key
Above all, any financial journey requires consistency. While it is easy to give up or maybe remain uncommitted.
Girl, you certainly ain’t going anywhere on your money journey if you ain’t persistent.
For instance, avoid starting off like the Energizer Bunny only to realize that your batteries have died.
Keep recharging those batteries – looking at your progress helps you stay motivated. Compare how you have done this month as compared to the previous. Next, take notes on how far you have come – how much debt you have paid off or how much you have saved. Finally, celebrate your wins (frugally!).
How do you keep your budgeting batteries charged? I would love to know.
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