Tips to Budget Like a Queen
Okay, so I have a accounting degree and for the past 11 years I’ve worked on the annual compilation of a university budget. I can build a budget for our household like a boss! The thing about budgeting is you can make anything work on paper. There will be some give and take and there will be some sacrificing. In the spirit of my 2017 mantra, waste not, the real trick will actually be staying within the budget, while also setting aside funds for things we really want to do over the next year or so.
Today, I thought I would share some basic principles for budgeting. No, this is not some earth shattering new method I developed, but I did spend some time rounding up some information already out there which I find to be solid.
First, this is just common sense, but living within your means is a must. While this is such an easy concept, I spent so many years in my youth living way, way outside my means leading to large credit card bills and so much stress over how it would ever be paid off. Even when we did manage to scrape together a vacation, I couldn’t fully enjoy it because I was concerned the entire time with every penny we were spending on food, outings, etc. Hello Shelly, save enough money to pay for the entire trip before you leave!! I really never thought I’d see a day of debt free living and even though I never missed a payment and didn’t ruin my credit (even worse because the credit card companies just kept raising the limit!), I was only making minimum payments and still spending. Sadly, I lost my daddy way too early but what he left me enabled me to pay off all of our debt and I vowed to never, ever let it happen again.
Let me also just preface this by saying, unexpected things happen that are sometimes out of your control. Sometimes even when you are doing everything right and living within your means I realize it could only take a medical crisis, a death, a lost job to create a negative financial situation. This guidance, is for someone living in a healthy situation and choosing to make the right choices to secure a positive cash flow in their future.
You don’t need a super savvy budgeting software to track your budget and expenses. Pen and paper works but can be cumbersome. I use microsoft excel and download all of my transactions several times a month and assign to categories. If you follow Molly, she has a series over the years, Molly’s Money and this post shows the spreadsheet she uses which is similar to my approach. Quicken is probably a software most of you have heard of as well and it might be a better solution for you. Most importantly you must track everything. Yes, even those cute heels you hid in your trunk from the hubby! I reconcile to our bank account every 10 days or so. Full disclosure, I still use credit cards every single month for almost every expense we have, but I account for every one of the transactions in my reconciliation as if the money is already spent as to not end up being “short” the funds to pay in full each month. I do love earning miles on my CC so I have found this beneficial for now.
Second, you do need to know how much your net income (what you bring home) is each month. Keith works in sales which means the majority of his pay is commission based so no two paychecks are the same. If you have a situation like this, average a reasonable period such as 6 or 12 months and use that as your monthly base.
Next, accounting for all your fixed expenses such as your house payment/rent, utilities, phone, etc. All those things you have commitments for each and every month. If your children are involved in activities with monthly dues I would also add that here. You can’t live without food right? So identify a food budget as well. I personally separate our groceries and dining out because it’s eye opening some months to see how much we spend eating out. These are all the things you need each month. I found this article which suggest a good rule of thumb for needs should be no more than 50% of your budget.
My mom always told me to pay myself first! That was really, really hard to do when I was broke but my goal is to set aside at least 10% every month in savings. Dave Ramsey would tell you to work to build enough to cover 3 to 6 months of expenses in case there was an emergency such as a loss of income.
What’s left? Well, you have your wants remaining. Like I mentioned last week, spending zero on frivolous items is probably not very realistic for me. Setting an amount I can spend each month will give me a little freedom to feel like I can have a little fun but accountability of staying within that amount will help us set aside money for bigger things.
Other considerations for monthly budgeting include charitable donations/tithing and also set asides for things like car maintenance and registration, home repairs and of course a little nest egg for those future vacations.
Having a record of where we spend totally saves me when we have a tight month because I know exactly where and how we typically choose to overspend. As I head into this year of wanting to waste not, it is important to take a close look.
Once you have this down the next step is accountability! If you are anything like me this means not just to yourself. I need someone else to know the plan and help keep me accountable and call me out when I overspend. I’m the money manager at our house and Keith is perfectly content just letting me handle things but I would really like us to have more time together reviewing all of our expenses. I totally think if I knew he would be looking at the detail I would think twice before I hitting the checkout button!
So do you keep a monthly budget? I can’t wait to read everyone’s methods!
Linking up with The Blended Blog for the “Nuggets” linkup! You can find a complete list of prompts for January/February here.
And to see all the fun linkups I love all week long click on the icon below!
Bingo!!! Great tips and I will try better in 2017 with ya. Talking myself, U do not need a 31st scarf, no I don't, lol!! I hope you have a marvelous Monday gorgeous!!
Budgeting….my least favorite thing however probably one of the most important. lol. We are definitely being more mindful in2017 as to what we spend and so far it's not as painful as I thought it would be. Have a great week
My husband does the budgeting around here and I am so glad he does. He's taught me a lot about respecting money and living within our means but old spending habits die hard, lol. I am a work in progress though and think I do a little better every day. Thanks for great information!
Solid advice Shelly! I have couple of similar "responsible adult" type posts coming up this week. Living within your means isn't always fun, but it's a lot more fun than being in debt!
James works for a sales organization in a management rule that allows him bonuses from time to time (usually quarterly). We don't know what that bonus will be till about 2 weeks before he gets it. When we get a solid idea, we will sit down and go over what we need to pay off (usual medical bills like when we were paying on C's delivery) or we will plan trips or home improvements and save 66% of the bonus. I don't know why 66% but this is what we've always done. We want to move some day so these bonuses are the down payment we need along with 6-9 worth of bills and living expenses saved in case we ever need them. Additionally, at the end of the year we are going to have paid our cars off. We plan to treat this money like we do now, needed for a bill, and send it straight to savings so we don't waste it.
And that's a lot of money talk from me at 8 AM on a Monday.
Yay- thanks for linking up! I loved reading your tips and can totally identify with a lot of them…especially with the no fancy software…I love paper and pen!
Yes to keeping a record of how you spend! Sometimes it's shocking to see it in front of you, just HOW much you overspend on silly areas.
So interesting! My husband does our budgeting and was going over our 2016 spending last night. He would love reading your post!
MeetTheShaneyfelts
Wonderful tips! When I was a single teacher many years ago, I had to budget down to the penny and put every purchase into Quicken. Now I'm not so specific, but I try to look at our spending and saving a few times each month. Love, love, love Dave Ramsey!
My hubby runs a multi million dollar business and is THE BEST EVER at managing money. Thank goodness I have him! We have been so blessed over the years with his money skills and that has enabled us to pay off our main home and also purchase a second vacation home. I try hard to not over spend. I have a monthly budget for groceries and clothing and do very well at staying inside that budget. Now he has been teaching our 24 year old who recently graduated college. I think that ALL high schools should make it mandatory for kids to take a money class and life class before graduation!
Yay, I always love reading how other people budget. It seems like we both budget the same. I created an extenisve excel spreadsheet for us, that automatically color codes when things happen, which makes this math nerd heart, happy.
love that you're linking up but love your tips more than anything! so helpful! I seriously need to do better at keeping a budget
This is so helpful! I love the tip to pay yourself first! So true!
I'll be working a harder on this in 2017 also. We bank at Bank of America and back in December I clicked on the budgeting tab which tells you how much you spend in certain categories. I was awed and ashamed!! It's definitely time to budget.
I've heard amazing tips about Dave Ramsey… I really need to get hold of one of his books! I have always been great at budgeting and saving money, but I'm always looking for ways to improve!
He really does have the best formula for living a debt free life….I'm too lazy to do all of his methods. lol
Girl….tell me! It makes me sick and then I just continue my ways. We could have probably bought a vacation home with all the money I've wasted over our marriage!
Truly is one of the top tips my mom gave me!
Really do think we can all do better! It is just our lazy ways that get us to inching outside our budget.
That's really inspiring Kim. I'm terrible…and we truly could have already paid off our home if I was a little more thrifty.
I think about my single mom days so often lately because it feels so great not to have to worry like I did then. Things like paying for a doctors visit or buying tires for my car are no longer a cause for panic. I'm glad for those days though because I do actually know how to stretch a dollar more than some for sure even if I don't do it like I should.
Totally shocking to me!! And my husband is always shocked when I show him our dining out expenses. Yikes…and it's just laziness!
That's an awesome way to handle those bonuses Stephanie! We should definitely be a little more practical with how we handle Keith's but usually we blow it on something like a vacation. This year is going to be about being a little more intentional!
Seems like this time of year is a great time to reflect on these things! Loved your post today….in fact I am adding to my calendar to call my lawyer now!!
Refocusing on quality vs quantity….sometimes when I stopped the random spending I realize I'm spending more time enjoying the people in my life!
Haha…for REAL! I'm about to do a major closet purge. When you have a hard time getting dressed because there are too many choices it's time to STOP!
Us too. I'm really ashamed sometimes …. but then I click over to the Loft website and forget about it. 🙂
I don't have many clothes or shoes. And I do try to be thrifty when buying but man I love me a Nordstrom Anniversary sale!
Bahahaha….same here!! Old habits die hard for sure. 🙂
It truly is the best sale! And it seriously always does me in!! Guess maybe I should just save my monthly clothing allowance until then! haha
You are lucky Sarah! I seriously wish someone would take this duty over for me.
Old habits definitely die hard!! I don't know what my big fear is with not having clothes….it's the weirdest but I just always want more. haha
It always does me in too! LOL
I do all the accounting for our business, but I'm not an accountant and it's not my favorite thing to do. Gah!! So then I'm really terrible about budgeting on the personal side. This is an area I definitely need to improve, especially with college costs in our current budget. Thanks for the great tips!
I am a Dave Ramsey girl. Love his advice. I'm almost finished up with no spend month one and girl I'm rocking it thus far! WOO HOO! Two more months to go!
My mom and dad always preached, I mean quoted Dave Ramsey. I think I need to finally start checking him out. Saving pennies this year to help pay for Christmas. That's a step in the right direction, right? Need to up my game to 10% (in any denomination – dollars preferably!)
He really does have the best methods for living a debt free life…and he is so credible because he lived it himself.
You go girl! I definitely have cut in January and I think the biggest was seeing my Target statement come and I only owed $28. I'm sure they are wondering what the heck happened to me!!
Like I said…I can justify the numbers any way I want to!! i need accountability for sure!