How I Budget My Month

How I budget my month

guest post from Melody, writer of HerDesignedLife.org

A budget can seem overwhelming when you’re knee deep in spreadsheets and 10 browser tabs open. Honestly, I’ve been there. Or perhaps you really just avoid looking at the bank balance all together. Trust me, I’ve been there before too. 

But budgeting doesn’t have to be overwhelming or annoying. 

Here is what I do to minimize stress when budgeting: 

Treat Yourself

When I decide to budget, I roll into a coffee shop with my husband or cuddle up on my kitchen table with a hot cup of tea. This way I associate something positive with budgeting. 

Make It A Date

When you first start budgeting, you’ll need to commit to checking, your bank accounts, and credit accounts more, because you’ll have to see what you normally spend. So finding time in your schedule each week is ideal to find out how you spent your money and to determine your finance goals. Each month after that if you find you are reaching your goals, ease up and then really check in one to two times a month.  

Simplify Your Life

Life is already complicated enough. You don’t have to make it even more unbearable by poring over hours and hours of spreadsheets or statements. Use budgeting apps like mint.com or ynab.com  or download apps like everydollar to review your past spending history and see where your money is going. 

Envision Your Goals

Say your goal out loud and write it down. Maybe you really want to start a business, put your kid through college, or maybe purchase a house. These are all great goals! When you see what your goal is and you envision how your life would benefit from it, you’ll find yourself able to have more self-discipline when you’re about to purchase something you might not need. 

Get Down with the Numbers

You don’t have to be a mathematician. I’m definitely not. First, check out what the monthly fixed expenses are and write them down. When are the bills due? Write that out on your calendar or put it on your phone. Add up your monthly income if you have more than one income earner in the house. Write down when those paychecks get deposited or are paid out. 

Checkout my free monthly budget sheet here.

Average Variable Expenses

Some expenses are not always the same. Those include groceries, electricity, water, credit card payments, home repairs, pet expenses, etc. What I love about mint.com is that it will average your transaction history and recommend how much you should set aside for these payments. This should give you a realistic number to work with and at the end of the month, you can see if you spent more than that or less. 

Commit Yourself to Your Goal

A goal is something that you work on constantly and is always on your mind, a wish is something you want to do but have not taken action on. Budgeting takes time and patience. You won’t always meet your budget goals; I haven’t. But, if you consistently see where you made your budget blunders, you can adjust your budget to account for those expenses. Sometimes that might mean you will need to stay at home for a movie or game night or choose to bring your lunch to work instead of eating out. These small sacrifices over time can help you save, but always make sure to budget for fun things too!

Save Money on What is Left Over

Once you’ve calculated your fixed expenses and your variable expenses, you’ll be able to see whatever the amount is that is left over. With whatever the amount is that is left over, I place that amount into my savings account and I don’t touch it. Now, sometimes emergencies happen and the savings goal can’t be met, but just be kind to yourself while you are figuring out. As they say, “Rome wasn’t built in a day.” You could say the same thing about your bank account. 

My Monthly Percentage Breakdown

We all spend money differently because we are different people. 

• I aim to give 10% back to my community by donating to charity, church, or a cause. There are months that I am consistent, but definitely times when emergencies or expenses get in the way of that commitment. 
• I started by paying myself 10% of my paycheck towards savings. Now I actually save about 15%  of my family’s income to help pay for my adoption expenses and grad school expenses. This was only possible after we saved our emergency savings account ( about 5 months of our monthly  expenses) and paid off all of our other debt besides the mortgage. Previously our annual payments towards debt were really high!
• We spend roughly between 15-20% of our income towards housing.  Some years it’s been closer to 30% due to home maintenance.
• 7% of our income we place towards retirement.
• We spend about 10% on food, dining out, and groceries.
• Bills and utilities are around 4%
• Our car we spend about 15-20% on, this month is was more because of some maintenance.
• Shopping expenses we try to keep low around 4-6%
• And travel expenses we spend more on, because we want to see the world. Last year we only spent 3%, but this year we splurged and it accounted for up to 10% over a three month average. 
• The remaining amount we use for other expenses like personal care, gifts, unexpected costs, entertainment, paying down debt, etc. 

Don’t Be Afraid to Ask for Help

If money is causing you to feel overwhelmed and stressed out, you don’t have to be afraid to ask for help. There is no shame is saying that you need help. Therapy is one way to deal with coping with stress, but you can also try journaling, or talking to friends. 

Asking a finance coach to help walk you through how to apply these steps is a really tangible way to keep you accountable, save you money, and decrease your stress. 

You can check out more information on my free finance strategy sessions here.

If you have any questions about budgeting, don’t hesitate to send an email to teachmemelody@gmail.com.

Happy Finances, friends. 

Article by Melody Johnson, writer and blogger at HerDesignedLife.com.

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