First off, congratulations on wanting to start budgeting. Making a plan for your money helps reach your financial goals faster and gives you peace of mind knowing where your money is going. With any change or a new skill, it takes time and patience to succeed. These are my four tips to implement before you sit down to write that first budget.
1. Find Your WHY
As cliché as it sounds, setting your budget up for success requires you to figure out your “WHY.” Our mindsets have a huge impact on our success. Having a compelling reason for why you want to budget will not only get you to start a budget but also stick to a budget even through difficult seasons. Let’s face it making a budget (and sticking to it) takes discipline. A phrase I always hear is “a ‘why’ to make you cry.” Now you don’t need to be shedding tears, but a good “Why” will draw out some emotion, and that’s great! When you discover your reason why you have something tugging on your heartstrings. This can provide motivation, and keep you disciplined in moments of discouragement. This reason changed my debt freedom trajectory. Right after I graduated from college with my first degree, I started a budget, I wanted to start a debt snowball and pay off those student loans. Now I have always hated the idea of debt. I hated owing somebody something. So that was my why, that was it “I hate debt.” This worked for me for a few months consistently then on and off for years. You see I was 22 years old, and while I had a lot of self-discipline I was still young and wanted to enjoy myself. I traveled to my college town on weekends to hang out with my friends. I got a new boyfriend (now husband) and we traveled several hours down to Denver, Colorado to watch different sporting events, and we ate out all the time. So some months I was really good about paying down my student loans, but eventually, it was back to minimum payments. During this period, I decided to go to nursing school. Did I choose to go to the more affordable community college which would have allowed me to keep working? Nope, I chose to go back to the University of Wyoming for 15 months accelerated program, which cost way more so I took out more debt. I wanted my BSN to be done quickly. This decision led to a cycle of guilt, justification, and then guilt again. Eventually, I had enough of feeling this way and in February 2019, we started budgeting and our debt snowball journey.
You see “I hate debt” would be a good way to start, but to have a compelling why I needed to dig deeper and keep asking myself “Why.”
I hate Debt – Why? I Don’t Like owing anybody anything – Why? Because it’s important to me to be self-sufficient – Why? Because I’m married and have a small son I don’t want my debt holding us back – Why? Because I want to focus on our family’s future, not on my past.
My Why
“I want to be debt free so I can stop the guilt and the shame of paying for my past, and instead start focusing and investing in our future.” Now I could go even deeper, but this is what I had written up on our debt snowball chart. This got us through paying off $$$ in debt. It took us a few years (thank you pandemic), but we’re debt-free except for the house and have used a budget since February 2019 to reach our goals.
So, my advice is don’t stop at a generic “I want to be better with money” “I want to pay off debt” or “I want to retire early.” Dig deep and keep asking why to find your “why.”
2. Communicate with Your Spouse
I cannot stress this point enough, you will not succeed if you and your spouse are not on the same team. Ladies, I am going to say this loud and clear “Our Husbands CANNOT read our minds.” You must be clear about what you want and why you want it. Phrases like “Hey, I want to save more money”; “We need to stop spending so much”; or even “Babe, we need to get out of debt” are not going to get hubby on board. First off those are all vague. The two of you will have very different ideas of what “spending less” means. Carve out some time that is pre-arranged (and child-free for those with kids). Tell your husband why this is important to you, and what you would like to do about it. He may not be receptive at first, but a good husband will want to support and love you especially if it’s benefiting the family. Give him time if it’s not an immediate yes. Ask questions yourself such as “What do you need to know?” This could be how much debt you have in total. Maybe what changes you would like to see, or your desired outcome of getting on a budget. Ask him what his concerns are, and don’t invalidate them, even if you don’t agree. And Please Please PLEASE don’t attack your husband for his spending. What do you think is more likely to get you guys on a budget and reach your financial goals?
- Hun, I’m scared of the way the economy is. We have $$$ in debt and no emergency fund. If anything happens to you or me and we miss a single paycheck we’re in trouble. I don’t want to live with this fear anymore. I want to start budgeting so we can pay off our debt and put money aside so we and the kids are taken care of in case of an emergency.
- We need a budget now! You spend way too much on beer and your new truck and I can’t take it anymore, you need to change your spending habits, so we’re doing this.
Communicating in an effective and non-judgmental manner is much more conducive to your relationship and financial health. Even if in your mind you saying #2 I get it I’ve had that moment too, but I’ve had my own share of financial mistakes, and frivolous spending. You can’t change the past but can shape your future so be kind. Stay tuned for another post about communicating finances with your spouse coming soon. I’ll go into more detail about suggestions and my own mistakes.
Now for my friends who aren’t married, but are in a relationship; I still recommend you talk to your significant other about starting a budget. Your spending will change, and it’s nice to keep everyone in the loop. For starters, they can help hold you accountable for sticking to your budget if you have someone in your corner cheering you on. For another, just knowing “Hey I know we always grab coffee and brunch every weekend, but I can only budget one weekend a month.” Just setting expectations makes things go smoother. From experience, I feel like a guy’s next response is “Are you doing, ok? Do you need money?” Reassure them you are fine and don’t need them to fix anything (because that’s usually their typical response) Just that you have financial goals and budgeting is how you’re going to reach them.
3. Track Your Spending
Alright, you know why you want to budget, and you’ve talked to your spouse and are on the same page. I have one more recommendation before sitting down and writing out a budget. Track your spending. You can google “How much should I spend on groceries for a family of 4?” “What percentage of my income should my mortgage be?” You’ll get some great knowledge, but you must know where you’re starting at. Sure, one mom feeding a family of 4 who has been budgeting for years can have a grocery budget of $500 a month, but is that realistic for you? What I did was I went back through our bank statements (thank you online banking!) and wrote down everything we had spent in the last month and put them into categories (Stay tuned for an upcoming blog post about my budgeting categories). That way I knew that we spent $1000 on groceries, and it was not going to be reasonable for me to budget $500. Now I can see that’s an opportunity for growth and improvement, but it’s not going to happen overnight. This helps you make a realistic budget.
4. Give Yourself Grace
While this may seem simple it is the most important tip I can give you to set yourself up for success with budgeting. You are probably going to suck at it for the first 90 days (3 months). That’s what the people at Ramsey Solutions preach, and I saw it in my budgeting. Budgeting is like any skill, you probably aren’t going to be good at first, but over time you improve. After over 3.5 years of budgeting, I’m on budget #43 lol, and it’s much more accurate than my first budget. Give yourself the space to be bad at something without quitting. So often I’ve heard from friends and coworkers “I’m not good at math.” “Well, I’ve tried budgeting, but it doesn’t work for me.” “I hate budgeting it’s too restrictive.” Permit yourself to try again, with a little self-discipline and grace you will be well on your way to your financial goals. You and your family are worth the struggle!
Snag my free spending tracker workbook. It will help you with tips one and three.
Hope these tips help you start your budget and reach your financial goals.
Until next time,
