Aug 2, 2012

A Different Kind of Diet: Budgeting



I'll admit that I'm not good at the following things:
  • Parallel parking
  • Cartwheels
  • Sports in general
  • Looking at someone in the eyes while speaking to them
  • Remembering where I put my keys, cell phone, sunglasses...
  • Saying the word "regularly"
  • Sticking to a budget
Each January, I make myself a budget, but quite frankly, I cannot, for the life of me, stick to it. Maybe I'm just bad at making budgets. Maybe I have no willpower. Maybe I have a shopping problem. Maybe its all the above. 

Budgeting is like a diet. It requires a certain level of commitment, ability to say "no", and sacrifice. Obviously, that's why its so difficult. 

I'm fortunate enough not to have any debt besides my car loan, so this isn't a matter of pulling myself out of debt, but more of a way to save money and create better spending habits. I save a bit each month, but there's room for improvement and sticking to a budget will enable me to save even more.

For the record, Brandon and I, even after getting married, have been keeping separate bank accounts, credit cards, etc. It works well for us and so he's not going on a budget necessarily, just me. I need to control the spending and he's already really good at that. 

So here's my plan of action.


1. Write out my goals. 

I spent last night really thinking about what kind of financial goals I want to accomplish for myself. I made a Google Doc of them and a date for when I want to accomplish each. 


  • Pay off car loan early - 10-1-12
  • Save $ for a new laptop, desk, and home office area - 12-31-12
  • Max out my 401(k) for the year -12-31-12
  • Save six months of income for a rainy day fund - 7-1-13
  • Save an additional two months of income for Brandon to put in our investment accounts - 10-1-13
2. Make a detail, categorized, and realistic budget.

Mint.com is what I currently use to track my expenses and I think they have a great budgeting program.


I listed the categories where all my spending comes from and, using my income, calculated the budget for each category. I then ranked them according to what I spend the most on each month. For me, that's bills, car (including gas and car payment) and food. Here's the rank: 

  • Bills and Utilities
  • Auto and Transport
  • Food and Dining
  • Gifts and Donations
  • Shopping
  • Travel
  • Health and Fitness
  • Home
  • Personal Care
  • Entertainment
  • Everything Else


    What I really love about this budgeting program is that there's this little thing called the rollover feature. 



    If you end up spending more or less of your budget each month, the positive net or negative goes into the next month. It is also where I need to be very careful, because I used to tell myself (especially with shopping) that I'd just spend less the next month and well, we know how that typically turns out.. So my biggest goal is not have any negative balances roll over to the next month.


    4. Question myself.


    I decided to ask myself the following questions when I browse the aisles of Target or any store for that matter:

    • Do I need it? Or do I just want it?
    • Will I use it?
    • Do I already have something similar? I have five grey cardigans...Mr. Rogers would be proud.
    • If it wasn't on sale, would I be willing to pay full price? I tend to buy things on sale simply because they are on sale. It's a quick way to end up with clutter and a lot of useless junk. I have a dress from Target that I think is sort of ugly now that I look at it again...but I was blinded by the fact that it was $6.00.
    • Do I have a place for it? We are limited on space here in the old apartment.

    3. Make the right cuts.
    Target / Amazon / Clothing. I took a good look at where I had been spending the majority of money in the past few months. It hasn't been food and it hasn't been entertainment or personal care (I get my haircut about 3 times a year, if that!), but it's more of those Target trips that add up. And the online shopping (looking at you, Amazon). And the clothing shopping. Those were the real areas where I need to cut back and really take note of what I'm spending.
    Cable. I can't change my rent, but I can change my utilities, so when our Tivo is up for renewal, we plan to cut that and just go to basic cable. We really only watch Netflix on our TV (and the Olympics right now) as it is. Most of our favorite shows are on Hulu as well.


    As with any new "diet" I'm super motivated and excited about the outcomes. Not only am I doing this to save up money for my goals, but also, I feel that it's important to build commitment and will power. I think these are two things that once you acquire them in one area of your life, you will translate into other areas; such as going to the gym or eating well-balanced meals. Certainly, they are two traits that I'd like to have.


    What are you favorite budgeting tips? Do you currently have any financial goals you are saving for?


    4 comments:

    1. Redoing a budget always invigorates me! (Nerd alert, I know). I think you've outlined an awesome plan. It always helps me to check in on my progress once a week so I can see how well (hopefully) I've done and keep myself motivated. You're going to do great!

      PS- I am happy to help you with cartwheels... I love 'em ;)

      ReplyDelete
      Replies
      1. Oh I'm a total nerd about this. I am always calculating my expenses and absolutely love creating spreadsheets on these things.

        On the cartwheel thing, you have your work cut out for you!

        Delete
    2. We stink at budgeting, but this is something I really need to get better at considering my current job situation. haha

      ReplyDelete
    3. Love your goals and ideas!! I am completely the opposite. I can't spend money. AND.. here's the kicker... if I do, I have buyers remorse and take it back! crazy huh?? I think I just lost my "woman card" if there ever was one!

      ReplyDelete


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