Dave Ramsey always says that either you tell your money where to go, or it tells you where to go. That’s what a budget is all about: purposefully deciding how you are going to spend the money entrusted to you.
Throughout the year we will be giving helpful hints for saving money and for planning how to spend it – my wife is excellent at this. Then in December we will discuss goals for the upcoming year, which is where we will do the extra work of budgeting and planning.
Eating An Elelphant
For me, the worst part of budgeting is how overwhelming it can seem…how could you possibly forecast where every dollar is supposed to go? Where can you even begin? After starting and stalling, sprinting and gasping, trying and trailing off for years, here’s what we’ve figured out:
1) Some areas of your spending you have a lot of control over. Focus on those.
2) The simpler you make your goals, the better.
3) Puppies, kids, and I need to be trained with immediate consequences. This can’t be something that you look at annually. It needs to be part of your weekly or bi-weekly routine.
K.I.S.S.: Keep It Simple, Senor!
We have found that we can simplify the process pretty well by keeping an eye on 3 categories of spending:
Restaurants = $$$$$$$
The goal for restaurants is simple – don’t spend very much. Not to brag, but our budget for restaurants is $20/week. That means we get one Subway stop or maybe a Chipotle feast (no drinks, no chips) per week, or one nicer restaurant every other week. We can eat at home for about $10, so every restaurant meal wastes about $10-20. Over time, that adds up!
Groceries: Thanks For Nothing, Bernanke
The goals for groceries are simple also. Have a list every time, and don’t buy more than 2 things that aren’t on the list. This limits impulse buys. Don’t spend very much money on candy, including pop. Spend more money at ALDI.
For retail, my stinginess kicks in: Try not to buy anything unless you have exhausted all other options. This isn’t overly fun, and it isn’t always a helpful goal because it is too vague. After all, ‘Retail’ encompasses everything from diapers to lightbulbs to laptops. However, that’s the beauty of it. Keep track of how much money you spend on stuff, and limit it. One simple goal we have is decrease the amount of money we spend at Target. Dana loves Target, and that is why we try to limit it! (Sometime we’ll share just how successful she was in 2012!)
Where to Begin?
If I were you, I would begin by keeping track of your spending in one of the areas this month. Do it in a way that is as high tech or low tech as you prefer. Download to Quicken, download to Excel, save receipts, use the cash method, use your smart phone, keep a piece of paper in your wallet, etc, etc. That will give you perspective about how much you spend now so that you can make decisions for the future.
It’s Worth It
Hang out with Our Purposeful Life for a while and we will share what we are learning about Budgeting and Money Management. No matter how successful you are, if you spend a little more time purposefully directing your finances, you will find that there are more dollars left over for ministry, necessities, and fun.