How to Stick to a Budget

>> 5.03.2011

I'm going to go ahead and confess that this post is for me. You can enjoy it and/ or learn from it if you want, but I'm  really just aiming at getting myself back in savings gear for the last few months before the wedding ($$$!).

Budgeting was pretty darn easy before this whole wedding thing came along. Back then, I only had to worry about my normal expenses plus any home improvements I might have made. My life was on auto-pilot and saving came easy.... but now, I'm not only faced with the normal home improvement projects and monthly expenses, but some hefty weddings expenses as well. My savings goals were actually increasing along with my expenses- a definite recipe for disaster! So, to buckle down over these last few months, I'm reminding myself of the keys to budgeting success:

1. Study* normal spending patterns and plan accordingly. It's one thing to say that I'll spend $100 on pet expenses in a month, but it's another thing to spend that at the end of the month. If month after month a certain budget categories are always coming up $20+ short, I know it's time to redo the plan!
*Study can mean tracking expenses over the course of 1-3 months or going back into old bank records to better understand spending habits.

Here's a snapshot of the savings planning spreadsheet I use to review my progress at the beginning of each month:

2. Expect the large bills before they show up. It seems as if it took me 2-3 years to start expecting my car insurance bill to come in the mail. Before I started planning to pay the lump sums twice a year, I would have a mini meltdown as I realized that the extra cash would mean that I wouldn't meet my savings goal for that month. Now that I've started planning them into my budget, I can happily say that I'm at peace with paying the $x00 bill as it arrives and able to stick with my savings goals.
2-a. Take note the unexpected expenses that throw off the budget. It might have taken me 2-3 years to figure out that I do need to anticipate those car insurance bills, but thank to a little note-taking, I've caught on to the fact that Hugo loves racking up emergency vet bills and should get his own category in the budget.

3. Remember the difference between "needs" and "wants." A "need" should always have a spot in the monthly budget whether it's in its own category or coming out of the flex emergency funds. A "want" can wait until it has a place in the budget without sacrificing savings goals.

4. Keep your eyes on the prize. This tends to be a tough one for me lately! I need to remember that the prize is not a new throw pillow or vase... it's paying for the wedding and having savings built for our other future plans.

Bonus tips:
*Only overestimate your expenses, not your savings goals. A master budgeter would end each month with zero remaining in the budget (maximized savings and minimizing expenses), but the real world is full of surprises that will throw off those savings goals in an instant. It's better to move extra money into savings than to fall short of a vacation fund after several months of inaccurate projections.
*Pinch pennies, but don't deprive yourself. Just like with dieting, you're going to crack eventually if sticking to a realistic and sustainable plan. I prefer to cut back in smart ways so that I can keep the things I love, but spend less on them (for example- using a coupon at a restaurant).

What big goals are you saving for right now?

And because I like putting it all out there for the blog...
Until we're married, Nate and I will have our finances separated. I pay big things like the mortgage, insurance, utilities, and everything related to the wedding while he works on building up a lot of savings and pays for food and other small expenses (that's why my savings totals have been in the negative numbers lately). In the future, we plan on combining everything but our "fun money" and I'll be in charge of the budgeting (because I'm the one who actually enjoys it).

8 comments:

Kate@TwentySixToLife May 3, 2011 at 12:55 PM  

You are so much more organized than me, lol. Very impressive!

We have a few big savings goals right now, but we just paid off our car so that was a big chunk of change from our bank account. So exciting to have that gone now though!

Elisa @ What the Vita May 3, 2011 at 3:57 PM  

I agree, budgeting is easy until something comes along. We struggled when planning for our wedding but made it through and you will too. Now our next struggle is a new baby! We're reevaluating our budget and will continue to do so until its born. It's definitely a great idea to keep old budget records!

Tobe | Because It's Awesome May 4, 2011 at 10:48 AM  

ugh, i just cringe thinking about paying for a wedding again. amazingly, we were able to do it + our honeymoon with nearly zero to pay off after. now we're focused on transitioning from a loft to a house and i'm having a hard time keeping my focus.....thanks for the reminder! :)

p.s. i LOVE using mint.com for budgeting and tracking where the dollas go. definitely recommend checking it out!

LizzieBeth May 4, 2011 at 7:33 PM  

Our next big goal is to go on a honeymoon. Sadly, it was one of those things that had to go by the wayside. Hopefully by October of 2012 we can afford it.

LB

Jenna Scott May 5, 2011 at 4:35 PM  

You are SO organized! I'm hosting a giveaway this week, that's about as organized as I get!

jennascott.blogspot.com

Kim at Yellow Brick Home May 7, 2011 at 11:14 PM  

Hah, you and Nate have the same plan that Scott and I put into action after we got married. Aside from a certain allotment of "fun" money we get from weekly paychecks and deposit into our own separate accounts, everything else goes into a joint account. That pays for our mortgage, groceries, dinners out together... stuff like that. The separate accounts really, really, REALLY help. He doesn't get mad at my new shoes, and I can't get upset when he buys a new thingamajig for his bicycle habit!

Suzy May 16, 2011 at 9:05 AM  

Right now I'm saving for an emergency fund - it's just me on my own so no help there! - but one goal right now is to pay off the car loan and the goal was within sight but got hit with that 'unexpected' new tire purchase plus possibly more expenses if they find something caused the uneven wear(tie rod or something like that) just depends(it's in shop now) and yes I should've know I'd likely need new tires after 2 1/2 yrs and 27000 miles but it still caught me by surprise!

AFter the car is paid off and I want to put that money towards savings and increase savings overall including changing my automatic payroll deduction to the small credit union with the better interest rate - want to put the car payment there then use INGDirect (or open another online account if the interest rate is worth it) and continue to build up emergency savings.

here's where I get stuck - once I'm done with the car and have emergency savings - do I try to refinance or just prepay the mortgage I already have? or do I save for something special and just a 'want'. I desire the financial stability of having everything paid off and only owing taxes and monthly townhome dues - curretnly around $450 total per month-I wanted the mortgage paid off in 15 yrs bu seeing as I've been here 11 already and only $11k of the 79k original loan is paid it's not looking so hot.

but I have the rest of the year and probably most of next to figure that out since it'll take a while to do the emergency savings and look into refinancing.

Susanna

Frudget Girl May 16, 2011 at 12:03 PM  

Budgeting is extremely important to me.

I grew up in a struggling household, where spontaneous spending could ruin us ...so I always wanted to THINK about purchases and budget --

As a kid, I saw my parent's deal with a series of landlords, and I wanted to own a home .

I would put money in the bank and simply pretend it didn't exist-- if an emergency came up I was usually able to scarmble around , sell something, moonlight, whatever it took --living on a budget always made me feel good and kept me active and out meeting people.
(I married a co-worker)

pretending there was no money in my savings account enabled me to buy properties. I have paid cash for every new car I've purchased. My car is only a few years old, so I have ten years to save for the next one.

home repairs set me back $7,000 recently, but a good investment as i plan to someday rent out my suburban house and retire to my rural house.

I save up for small purchases and am a cash girl except for travel, of course.
I've never felt deprived at all. I have plenty of nice things. I try to live "in the now" and be happy and grateful to have so much.
I've traveled all over the world, both by backpacking and going the luxury route, and it's all because I can stick to a strict budget, and plan ahead.

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