Do you still struggle with budgets, despite trying as hard as you can? And sometimes it feels like Excel might never make sense…
How the Story Goes
Sure, the premise sounds simple. Get a paycheck, pay bills with it, and divide what’s leftover among other responsibilities including debts and savings.
Now, a fiscally responsible person would have taken that sum and said something like this:
Hmmm. Now that I have paid all of my bills, I have $1200. I will budget $200 for this month’s food, $200 for savings, $150 for gas and car repairs,$150 for blah blah blah until all of the money had its home and I could go forth feeling responsible and having saved for my future.
While I certainly started my fair share of months with that plan, I have never actually managed to finish one.
Fortunately, for my savings account and for anyone else trying to get mature about money, I have had a startling realization.
Scheduling Your Spending
Get this: The same way you pay the minimum or correct amount for your bills (which I always do) and the same way you pay them on a certain day (which I also always do) is the same way you can budget your monthly personal expenses.
“Wow,” right? (At least that’s what my mom said.)
It should have been startlingly obvious for the past three years, but it wasn’t.
I would say to myself, I can definitely get by on $200 for food this month – that’s a very very generous amount, and $200 is the amount of money I would have in my head every time I went grocery shopping.
So my first $55 bill, I said great, I haven’t gone over my budget. The next $45 bill…super… You can see where this is going, right?… the next $75 bill…super… until suddenly I’ve run out for groceries four or five times for $45-75 a pop.
Until suddenly I’d thrown my budget to the wind.
However, if I schedule the behavior and the amount (that is, schedule my grocery shopping, not just the amount I intend to spend) suddenly the “bill” is paid and the mental budgeting is over!
So your schedule might look something like this:
Monday: $10 grocery shopping trip. Done. That bill has passed, I won’t pay it again.
Wednesday: $7 scheduled breakfast. Done.
Thursday: $35 grocery shopping trip.
Soon, you can look forward to a planner full of “scheduled bills” to be checked of when it has been “paid.”
Using this strategy remove a lot of stress from your fiscal life. If each purchase and expense (to the best of your ability) is planned out and scheduled, suddenly the burden of gassing up your car in two weeks (or filling your pantry in three weeks) isn’t so great!