February Better Me Challenge:How much does my life really cost?
This month we are going to dive into budgeting. I know, no one likes to budget and it’s too hard. Yes, it is, but I have found some great ways to keep your budget and spend money without feeling guilty. That is the problem, right? We try budgeting and we do great for a week and then we feel like we need a break, or a reward, or maybe feel like crap and want to feel better with buying stuff. If any of these things sound like you then you have nothing to lose and only financial stability to gain.
Through this process I will not be asking you to reduce your spending, only to be honest about it. After all; if you lie, it will only be to yourself. We are all different and find different things to be important, that’s what makes us human. The budget we are creating will be based solely on what you find important and your financial goals. We are going to take 1 step each week this month towards building our budget.
In this first week, I want us to figure how much our monthly bills are and look at any subscriptions we may not use anymore, or we have multiples. We also have to add up all our necessary spending; food, prescriptions, things we need on a daily basis. For those of you that did the spend freeze last month, this step will be easy because it will be the total of what you spent last month. This is your household spending.
Now we’re going to add up our personal spending. When adding up your spending for the week include everything and change nothing. We are adding up our spending habits. If buying lunch for work or morning coffee is something important or your necessity add it. This assessment of your spending has to be focused on what is important to you. Although you may find a shift in your priorities towards the end of the month, stick with what is important to you and adjust as we go.
If you have a partner, it is important that they are adding up their personal spending as well. By having a clear picture of how much each needs to be contributed to the household and how much each of you is required to have for weekly spending, your budget can eliminate conflict by allowing for your individual needs. This is where, I think, I always fell short. I didn’t think I could put money to just spend into the budget. This led me to feel like I was working to just cover the house and everyone else. When I would buy something for myself, I felt like I was taking something from them.
Don’t worry about the figures at this point. Over next week will be looking to see where we can reduce amounts. While I was figuring this out during the spend freeze, I was pretty surprised at my figures but since I wasn’t spending money, it wasn’t overwhelming. Before I set up the accounts for the budget, I had significantly reduced the household bills while giving my husband and I “guilt free” spending money each week. We’ve never had that. If you didn’t do the spend freeze, you may want to start with that.
In week 2 we will see where we can reduce our bills or negotiate with billers to see if we are on the best plans available. Again, I’m not going to tell you to give up anything. We are going to focus on saving money on the services we already have or reducing them if you want to. I reduced our monthly bills by $100.00 a month, that an additional $1200 a year of cashflow without losing anything we liked.
In week 3 we are going to figure put our priorities. This is where I feel you might see a shift in your daily spending. This is where I want you to stop and think about what you say you want in conversation. Do you and your spouse talk about a date night that you never have money for or a yearly vacation you say your going to plan for. We all have these things we want to do but not the money to do them. We’re going to make these things happen.
In this final week we are going to set up a spending savings plan that will align the money coming in with our priorities. Budgets are great as long as they are designed with your success (not my success) in mind. The bottom line is, if the steps are simple and you’re getting what you want you’ll do it. The thought of budgeting for me was equivalent to gouging my eyes out with a fork. I wanted nothing to do with having everything I work so hard for already accounted for. I want to spend my, hard earned, money when and how I want. With my budget, I do just that.
I am not perfect at it, I still have my days where not all my money can be put into all its places but I have made drastic changes to how I spend money and it has been really fun and has significantly reduced my stress all around.
Part of creating my budget was including a mad money account for both my husband and me to spend on whatever we want. These accounts are equal amounts each week. I don’t have to feel guilty or like I am taking from my family when I want to buy myself an outfit at my favorite store because I put that in my budget. This can make a significant difference in families where one or both spouses have issues with spending money and the other places judgement. The most important thing about your mad money account is that you can spend it any way you want without guilt or argument and both partners need to respect that in order to work. These accounts also need to be equal.
I am not a financial expert, more like a financial failure. I am working hard to change that and really feel like I found a true turning point for me. This system that I am using may not work for everyone and it is only the beginning in creating a better financial future. I am a work in progress and will continue to write about my progress in hopes that it may help someone else either get out of their own way sooner than me or strive to make whatever changes they feel they need to make in their lives. Please share below any comments or ideas, I’d love to hear from you!
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