If you resolved to make 2015 the year of the budget, then have we got a post for you! Whether you’re starting your very first budget, jumping back on the horse for the umpteenth time, or adjusting it for life changes like marriage or new kiddos, we wanted to share everything we wish we’d known before we started a budget. So jump in our time machine and let’s relive all of our mistakes!
1. You’re going to fail, and sometimes it’s going to suck.
Weirdly enough, those are actually supposed to be words of motivation. We’re all human. We mess up sometimes. Or life happens. Or we just get lazy. I like to compare it to a diet. Have you ever stuck to a diet perfectly? Don’t tell me if you have. I have not. In a moment of weakness, I might eat a cookie or ten, and suddenly my diet is totally ruined forever and ever. Unless! If I just keep on truckin’ and try to be better, those ten cookies won’t make a big difference in the long run. Same with budgeting. Having one bad month is okay… you just need to regroup and try again.
Now moving on to the sucky part…If you have a tight budget, or if your budget is tighter than it used to be, it’s going to feel uncomfortable for the first few months. And if you’re accustomed to buying what you want when you want it, it’s going to really suck at first. But when you stick to your budget perfectly for a whole month, it will feel so empowering. And when you start meeting some of your financial goals, you’re gonna love it even more.
2. Your budget will ride or die based on your ability to track.
Okay, pop quiz time. What have you bought in the last 12 days? And how much did each purchase cost? Now add all that up, and categorize it, too. And if you’re married, I’ll need you to also tell me everything your spouse bought. What’s that… you need a pencil and paper? Nope… do it all in your head. All right… enough of this nonsense. The point is, you need to track your budget somewhere other than your head. Mental budget tracking is unpossible (which should be a real word, by the way). Johnny and I have tried to mentally guesstimate our spending over the course of a month, and it has NEVER been right. Daily tracking is key to sticking to the numbers you’ve set.
3. It will be uncomfortable to explain to friends and family.
For the most part, Johnny and I avoid talking directly about our budget to friends and family. It’s personal. Especially so when we were paying down our debt. Despite our best efforts to stay in the budgeting closet, there were situations where there was no other option than telling others that we were on a tight budget — the “Johnny’s allergic to all food that costs more than $12″ excuse didn’t work too well. Depending on your financial situation, you may need to be open about it, too. Some people will understand, and others may not. But it’s not about them. You are doing the right thing for your future, and that’s all that matters. And who knows, maybe your friends/family/coworkers are closeted-budgeters, too.
4. Don’t overcategorize.
When we first started budgeting, Johnny and I had a million different categories. Pet supplies. Toiletries. Car washes. Cat sweaters. It got really tedious and weird. And then it got frustrating when those categories fluctuated from month to month, and we were left never hitting the right numbers in our budget. And it really affected our budgeting mojo. We solved this problem by creating an Everything Else category. We could spend as we pleased within it, as long as we didn’t go over the grand total for the month. If you want to hear more about how it works and why we find it so liberating, read this post.
5. Find a support group.
During many stretches of our debt payoff process (when our budget was especially tight), Johnny and I felt pretty alienated from our peers. We felt like we were the only ones keeping a budget or watching our spending. Of course, this wasn’t actually true, but because budgeting is such a taboo topic, we sometimes felt totally alone. Reading personal finance books and listening to Dave Ramsey’s radio show helped remind us that other people were in our exact same boat. When we started feeling a little more comfortable in our budgeting skin, we’d start putting out little hints that we were Ramsey-ites. And when we found a fellow budgeter within our social circle, it was the best! I just wish we’d known about personal finance blogs back then! Even now, all of you like-minded folks help keep us motivated with all of our financial goals.
We learned all of those tips the hard way. And by that I mean the fun way!…not really. Hopefully reading this will spare some of you from learning it the hard way, too. Those are just our top five, but there are so many more items that could be added to this list. So help us round out the list: what’s the one thing you wish you’d known before you started budgeting?