Budget; telling your money what to do

I’ve always known what a budget meant, and for years I put together a monthly plan that allocated a certain dollar amount for miscellaneous items on a weekly basis. That didn’t work for me. I was so strict with my weekly budget that I often overspent, and through sheer frustration, the budget went out the door and my money continued to rule me. It wasn’t until I began to examine my personal spending habits that I understood what I needed to do to gain my control back. I learned that everyone has their own financial goals and spending habits, and there is no one way of putting together a financial plan to fit an individual’s needs. Once I learned why doing a budget was so important, and how to do it based off of my individual needs, I found greater financial success in my life!

A lot of people wonder why it’s so important to budget, or make a monthly plan on where the money is going. Personally, I’ve tried to go a month without a plan. I was so frustrated over the strict budget I gave myself weekly, that I figured maybe going without a plan would be better. I was so wrong. There are many things that can go wrong when you don’t plan ahead, but here’s what I found that dreadful month:

• I forgot to pay bills! I didn’t have an agenda, and with life and busy schedules, there were bills that I simply forgot to pay.
• I was still overspending. I didn’t have my strict weekly spending plan so I went the other direction and spent, spent, spent. I used my “just in case of an emergency” credit cards to pay for groceries and gas at the end of the month. My checking account was at zero and I had so much month left with no cash.
• Of course with the first two things going on, I became extremely frustrated. I still hadn’t won over this money issue and I was going in debt by using my credit cards for simple things.

I’ll be honest; it wasn’t just one month I went through the “no plan” experiment. I had many months like that, all of which I financially failed.

I began reading more on money management which really started to help me adjust my thinking.  I finally followed some of the teachings of Dave Ramsey (The Total Money Makeover is a must read!) and wrote down on the top of a piece of paper my income for the month. Under that, I wrote out all of my expenses until every dollar had a name. This method was so different than what I was doing before because instead of doing a weekly plan, I did it monthly. Some weeks I spent more than others under a certain category (i.e. food) but as long as I stayed under my monthly allowance, I was ok. It was less restrictive and I had more control over my money.

I recently told a friend of mine that ever since I started taking more control over my money, stress over finances dramatically decreased. It’s true! Once you have control over something, you notice you don’t stress over it nearly as much. It’s a weight lifted off of your shoulders. Budgeting is about giving each dollar you make a name. Even if that name is “dining out”, or “hair allowance” or even “coffee”, be intentional with it. Believe me when you start this, you’ll notice change in your life.