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.
*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).