This is the first post in the Creative Savings’ Beginners Guide to Budgeting Series. You can find links to the rest of the series on this page. If you are looking for ways to manage money better then I have a full page dedicated to that topi over here.
I'm a major believer in budgets.
I started budgeting the day I received an allowance {yes, I was that kid!}, and the majority of my birthday money always went straight into my savings account. I think I had more fun watching it grow, than actually spending the money!
Even though I do enjoy crunching numbers, the main reason I'm so in love with the word budget, is because it works.
- We had a beautiful wedding under $3,500.
- Both cars had 5 year loans on them, and were each paid off in 2.
- Joseph and I love to travel, and go on at least one nice vacation each year.
And it's not because we make enough money to afford those things. Logic says we really shouldn't. However, everything we've ever paid for, saved up for, bought, or wanted, is because of our budget. It's made the impossible, possible!
A Budget is Your Financial Roadmap
I like to think of budgets as a “set of directions” for your money. Without it, we would both be completely lost, unsure of what we should save, and where we can spend. But sadly, that's how many of us have decided to navigate life.
A Gallop Poll conducted over the Summer of 2013, found that only 32% of Americans actually have a personal budget. That means 68% of Americans don't have a budget at all. They have credit card debts, mortgages, school loans, and spending problems, but they don't budget.
Can I ask you a personal question? Which percentage are you in? The minority who budget, or the majority who don't?
I totally get not wanting to feel restricted by a spreadsheet that tells what you can and cannot spend. But if that's the case, then you need to wrestle with these questions too:
- Do you have financial goals you'd love to accomplish? A family vacation? A newer car? A house instead of a rental?
- Wouldn't it be nice to have the exact amount you need to pay your bills…every month?
- Wouldn't it be even better to know exactly what you can spend, and not feel guilty about each purchase?
It's much harder to do any of those things without a budget. And honestly? I think you'll experience a lot more freedom than you think.
With a budget to help guide your spending, you will never be caught off guard by another expense. In fact, you will be even more prepared by setting aside the right amounts in anticipation of the next bill, due date, or financial goal.
Should your income or expenses change, a budget is extremely versatile, and can be adjusted according to your needs or future plans.
Doesn't that sound doable…..even preferable?
It's Time to Start Budgeting….Now
Maybe I haven't convinced you to start a budget, and even so, I hope you'll stick around and glean what tips from this site you can.
But if you're ready to give it a shot, then I encourage you to take the next step and follow along with my Beginner's Guide to Budgeting series. In the next few weeks, we'll be talking about how to track our income, what to do with expenses, how to set up a budget sheet, and the best tips for maintaining a healthy budget.
A budget really is the most powerful financial tool…you just have to know how to use it. <– {Click to Tweet} But once you learn, you'll never want to go back. You might even fall in love with budgets as much as I do!
Are you ready to start an incredible journey? I'll be right here to help you with any questions you have!
Oh yes! We definitely have a budget. It’s like anything else requiring self-discipline – diet, exercise, etc. it takes a little work, but the rewards are great. Not having to worry about paying the bills is priceless to me.
We just upgraded our budgeting app (YNAB) and now we can enter our transactions on the go as we make them. I’m thrilled that my husband is now entering his purchases on his smart phone. Little things like ease of use go a long way toward keeping up with the budget.
Thanks for a great post!
I have seen that app, but haven’t had a chance to try it yet. It sounds pretty cool!
Hi. Kalyn! I am part of the larger percentage. I have been wanting to make a budget for quite some time, but never have. I often feel like I have so much debt, and only so much left over that there is not much to budget. It’s as if my income is already predestined, if that makes any sense. However, I want this year to be the one in which I give this a shot. I found your blog at a perfect time. Though setting a budget is one of my 2014 goals, I have not done much in the way of achieving it during January. I am looking forward to following your series. Thank you! 🙂
You are SO welcome! I’m excited to have you here, and I totally understand feeling like there is nothing left over after all your expenses. Here’s to changing that in 2014. 🙂
Thank you, Kalyn, for the warm welcome 🙂 And for the encouragement!! 🙂
Glad to have you here!
My favorite thing about budgeting? It gives me the freedom to enjoy some “fun money” without guilt! Our income is not the greatest, and it’s very sporadic (like 3 months worth at a time). Before we started budgeting, we were never sure where the grocery money was going to come from (of course, we were both out of work at that point too), and we certainly didn’t buy anything extra – Goodwill trips, Walmart candles, and even McDonald’s dollar menu was off the list! But once hubby got a good job, and we worked out a bare-bones budget, it was such a relief to have even $20/month to spend on those things – AND not have to worry about buying groceries and paying bills. Yes, things are still tight, but it really eases the worry!!
We don’t have a budget. I’ve looked at pretty spreadsheets and thought about doing them, but the bottom line is: We live within our means. We don’t have credit card debt. We pay extra on our student loans and then we’ll devote extra to our mortgage when student loans are paid off. We save up and pay cash for special treats (vacations, new furniture, etc.) and still manage to grow our savings. And we don’t make tons; we’re teachers. 🙂 All that being said, I will probably look into budgeting more when we have kids and our financial needs change.
Good for you! It sounds like you are doing a great job. 🙂
No and I am looking for recommendations to help me find one.
I hope you enjoy and get a lot out of this series, Erin!
I definitely have a budget and it has made a huge difference in the way we live and in our ability to pay cash for things. I just wish we would of budgeted before we had kids and really saved a bunch of money before I came home to be a stay at home Mama! If we would have started living on my husband’s income for a year or two we could have really saved a substantial amount of money as I was the main bread winner! Thanks!
We have a faux budget. Faux b/c it doesn’t include food or gas or extras. It’s just has the bills, student loans, mortgage, etc. We can definitely use a real budget though. Looking forward to the budgeting series!
We have been budgeting for two years now. When we first started budgeting, I couldn’t believe how much “extra” $$$ we came up with. It seriously felt like we received a raise. We are now on one income due to an overseas move and our budget is the only way we are able to travel as much as we do. Thanks for sharing such a great post! Found your blog via the “Living Well, Spending Less” link party. 🙂
Thanks for stopping by! I love how a budget lets us “treat ourselves”….within moderation, of course. 😉
I’ve budgeted off and on for many years – but we have had a hard time sticking with it (you know the drill, one partner goes “off the budget” and the other thinks “why do I need to deprive myself if they aren’t” and everything is forgotten. Well, we are determined that this will NOT be us this year – we want the bills GONE and it will be done this year!!!!
I know exactly what you mean! Once the ball starts rolling, it’s hard to make it stop. 2014 is YOUR year! 🙂
Great Advice! We have had a working budget since 2006 and it has totally saved years of possible “money fights” between my husband and I.
~Sarah
We have a pretty tight budget, but I had troubles keeping to my “allowance” for entertainment and non-necessity purchases (the wants, not the needs, like drinks with the girls, et.). So, my husband opened me up my own separate checking account with a debit card and at the beginning of every month my “allowance” is automatically transferred over to do with as I please. It has worked wonders! I can check my balance on my phone and see what I’ve spent, and even better, I can save for items I want to buy myself that are true splurges. To be fair, he has his own account and his own allowance, too, and the same rules apply for him. But when you’re trying to live on a budget and watching every single dollar, it really helps!
I agree – fun money is a must, even if it is a small amount each month. It lets you breathe a little bit and not feel so restricted by your budget!
I don’t have a budget right now. I tried to start one, even bought Quicken to help! I can’t figure out the best way to use that software, and it’s become a waste of money. Our Pastor did a series at church about how important our financial well being is, and quick easy ways to budget. I’ve been committed to making a budget this year and sticking to it. I’m excited about your series!
I’m so excited to have you here! Expensive software does nothing if it’s not a system that works for you. I’m looking forward to having you try mine out and see if you like it!
We are definitely budgeters! I was shocked by your stat about how few people budget. Budgeting has helped us to anticipate expenses and we can spend guilt-free b/c we know the money is there! Great post!
Thanks, Sarah! It’s good to know there are other budgeters out there! 🙂
How do you best have a budget when you stay at home and your husband is self-employed (has his own business-woodworking) etc.. and we can go WEEKS without pay and when we do get paid it’s either barely enough to cover our back bills and most of the time not even enough to cover.. We have downsized as much as possible.. Pretty much debt free besides house as well. Just not sure how best to do this and there is not much direction out their for someone who works this way.
Income that changes month-to-month can be really difficult to budget for, but it’s not impossible.
Even though his income will be different each month, they key is to work from a budget number that won’t change, no matter how much he brings home. Meaning, you don’t live from paycheck-to-paycheck, you take out a specific amount from the bank each month that now becomes your monthly “paycheck”, regardless of his income. Some months, his pay will be higher, so save save save for months when it will be lower to cover that same monthly amount. To figure out the right amount to pull each month, you will have to do some number crunching with your expenses, using one of his lower paychecks as a starting point. I explain more about that here: https://kalynbrooke.com/frugal-living/budget_basics/building-your-first-budget/.
I hope that made sense, and helped at least a little bit. I wish you and your family the best!
We used to have a budget but fell off the wagon about 5 years ago. Now hubby actually makes more but is talking about me going back to work full time. I am reinstituting the budget before I am willing to do that! This is perfect timing for me!
Awesome, Emily! I sincerely hope it helps you. 🙂
Yes, we have a budget, but it’s more of a reminder we have to keep things in check more than anything. We are in the red monthly, God always provides, but I am def. trying to rack my brain and get creative in more ways to save.
You’re in the right place, Grace! There are tons of ideas to save creatively here. 🙂
I am so happy that I stumbled across your blog! Just this morning in fact…. I struggle with my finances and constantly “float” just looking at my bank statement every few days and think “yup, moneys in there I’m fine” and then checking a few days later and wondering where its all gone. I’ve had it with myself!! I am finally going to take charge and pat down some of my debt. I am a single gal on a single income (thats not too great…) but I am finally willing to do my best and make it happen.
Nicole, I’m so glad you stumbled across here too! That is so exciting that you’re ready to make a change and get your finances in order — such a big step but SO worth it! Please let me know if you have any questions or if there is anything I can do to help. 🙂
Hey, I do not have a budget. Not because I do not wish to have one but I am without a job and still in school. I would love to start to save but I don’t know how. Should I start having a budget?
Hi Sonja! If you have any expenses, or if you want to save up for something big {like a car, home, electronic device, etc}, then yes, I would recommend you have a budget. A budget will help you set aside a certain amount to cover those expenses {or save up for an item}, without having to pay for it all at once! 🙂
Sad but true…in the majority of folks not living on a budget…I have never been able to find one that makes sense to me…I will sound like an idiot to most of you…but it’s hard for me to comprehend the idea of budgeting because how can you predict what is coming… I realize this sounds ludicrous… But I’m just being honest… When I’ve tried before to figure one out it ocpverwhelmed me and frustrated me so much I gave up… Plus honestly, the word budget makes me feel deprived and rebellious! Not sure if I can be helped with this but am willing to give your series a try… Because I know I need to do something radically different because my spending is not in check and with the income I make I should not be struggling financially… It’s something always in the back of my mind…
I hope you give it a go, Sandy! Take small steps. For figuring out the income, if you have a steady paycheck you can use that to figure our how much you make each month. If you have irregular income {you work on commission or do contract type work} I have a post in the series that deals specifically with that: How to Track Irregular Income.
Don’t be afraid of a budget – think of it as deciding where your money is going to go BEFORE you spend it. As opposed to just getting your statement at the end of the month and seeing where it all went.