Friday, May 13, 2016

Budgeting: 5 Tips for Getting Started

There's a whole lot that goes on just to get started on your journey in budgeting.  It can be confusing. It can be overwhelming.  It can be discouraging.  But that doesn't mean it isn't worth it in the end!!

Here are 5 Tips to help you get started.

1. Find a Program You Like

There are plenty of programs out there from which to pick. Look for one the not only will accomplish what you want, but will also be easy to understand and follow.  You know that old adage - K.I.S.S. ?  You're starting on a journey that is already probably very different from the way you've been living.  Don't add to your troubles by picking something that is hard to understand and seems overly complicated and makes you want to pull your hair out before you even start.

The program our family went with is Dave Ramsey's Financial Peace University.  Highly recommend this!!  Do we do everything just exactly like Dave?  Nope.  However, we do probably about 85% of it or better.  It's easy to follow AND understand.  Plus, we've found success with the program.

2. Get the Right Mindset

This is going to be a journey.   You'll be making changes, but those changes will take time to get used to and fully implement.  Think marathon and not sprint - the first few months might be a little painful, but the end result is worth it all!

3. Get Everyone on Board

There's nothing worse than starting something and then having the people closest to you undermining your efforts.  Getting on a budget can be a huge lifestyle change, so you will possibly have some major resistance from the people in your family effected by this change.

Before you start, it's a great idea to have a discussion with all those involved.  The big conversation is going to be with your spouse (if married).  You're a team and even in budgeting you need to be on the same side.  If you have kids, let them know that things might be changing - less eating out, fewer movies, and not as many toy purchases, possibly.  Just remember: YOU are still the adult and parent. Don't completely stop all fun, but also don't let the kids guilt you into spending money you don't have.  Trust in the process and know that the fun will come.

4. Get Organized

Knowing which category to put your money in and how much to put there, can be overwhelming (and close to impossible) if you don't know what you're spending.  Take a look at your bank account, credit card statements, receipts scattered around your home and car, and gather up the utility bills.  All these numbers will give you a great place to start.  It might even be surprising where you spend a lot of your money without even realizing it - all those QT and coffee purchases can add up!!

We rely heavily on our budget spreadsheet and our money envelopes.

The spreadsheet was something we just did on our own.  The SpendVelopes hold a good amount of cash, are a little bigger than other money envelopes we've found, and are extremely durable.  Our first batch of envelopes lasted over two years and only purchased a new batch when a couple of our most used envelopes just had no life left.  It's definitely money well spent.

Any budgeting program or course you decide to go with may have tools built in for your use.  Keep things simple whatever you decide to do.

5. Get Ready to Fail

Ok.  So, maybe that isn't the best pep talk addition, but it's going to happen.  Pretty soon you'll get to day 25 of 31 and realize there just isn't quite enough money in that one area of the budget to make it all the way to day 31.  (Maybe not even to day 26!)  I just want you to be ready for that day and not be completely blindsided when it comes.  And it WILL come!

This whole process is going to include some trial and error for a time.  Don't think this is going to be a one time 'plan it and done' type of thing.  It WILL NOT be perfect from the start.  There is some beauty in that imperfection, though.

When I'm asked I always tell people to give it a good three months to get things figured out (maybe longer).  During those three months you will learn a lot about your spending habits, money personality and where all that extra money really goes each month.  It's a learning process, allow yourself to learn.

Even though it won't be perfect, try to stick as close to your written budget as possible.  Once the kinks get sorted out, all the planning and work will be worth it.  I promise!




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