Setting a Budget and Sticking to It
It’s a new year and just like most parents around the globe, we’ve all set goals on our health and our family’s happiness. We’ve vowed to eat healthier, exercise more and even be kinder in our approach to others but what about our family’s financial well being? Have we set goals in making sure we are spending like we should in 2013? After being frustrated by the lack of money saved in my household, my husband and I sat down and really looked at what we spent in a month. We were blown away. Of course we spent money on essentials like childcare, groceries and car repairs but there was a lot of money going out of our household that was totally avoidable. Things like my husband’s daily trips to Starbucks to my addiction to spending money in boutiques. After meditating on the numbers we decided that 2013 was going to be the year we started to protect our family’s finances by setting a budget and sticking to it.
Before actually developing our plan we literally had to sit down and determine what was important to us as a family- saving money or enjoying treats like eating out a restaurant. After a lot of tears and arguing we finally all decided it was more important to be cost-conscious and save money. We set our budget and for a month now we’ve been working (and reworking) the numbers to make sure we actually save money. While setting the budget was difficult, what was more difficult was actually sticking to it this is what we did:
1. We put our on paper. It was one thing to set a budget but when it’s actually on paper it can be a harsh reality for us. Putting your budget on paper will allow you to actually see what the goals are for our family.
2. We only spend cash. Every week we have a set amount of cash to spend. We take our cash and use Dave Ramsey’s envelope system to manage how we spend our cash. We carefully use it in case emergencies occur, so it’s imperative that we don’t spend money on things we want instead of things we need. This cash fund is for unexpected expenses such as car repairs, money for school activities, etc. One principle we had trouble sticking to was the concept that when the cash is gone, it’s gone.
3. We pay ourselves first on each payday. Every time we get paid we automatically pay ourselves 25 percent of our gross income. This is before we pay anyone else. This was difficult at first because quite honestly I would usually take that 25% and go and buy myself a new dress or pair of shoes. Under our new budget it’s mandatory to pay ourselves first so we can actually spend money.
4. We constantly revisit the budget. We are only in month 2 of setting a budget so there are times when we have to revisit our budget to make sure the numbers are still accurate. For example, I budget spending $150 a week on groceries but many times that number is much lower because my family eats mainly unprocessed foods which are much cheaper. So if I continue to have that spending trend then I could possibly lower it to $100 per week and move that $50 to another part of the budget.
5. We look for deals on our everyday spending. For example, if I need to go and buy Band-aids, bleach or any other household project, I first check for coupons and specials that local stores have. Our motto is , “Don’t spend it if you can get it for less”.
Creating and sticking to a budget is hard but we are determined to make 2013 the year that we save money to protect our family! What about you?
Words by: Franchesca Lane-Warren