I did a poll on Instagram the other day asking if my followers stick to a budget or not, and I was surprised to see that most of my followers do not practice budgeting! No shade at all, it just surprises someone like me who is kind of a psychopath about money. How do you guys do it?! I need a clear picture of my income and expenses for the month, or I will lose my damn mind.
I’ve dabbled with different budgeting techniques over the years, but since my boyfriend moved in with me and we combined finances, I’ve had to get creative with budgeting. Not to mention, we are both self-employed and can never count on a consistent paycheque every two weeks, so we have to regularly check our budget to our income.
For the last few weeks, I’ve been utilizing The Budget Mom‘s worksheets to lay everything out in front of me. She’s made great templates that make it easy to see all of your income, fixed expenses, variable expenses, debt and savings at a glance, to properly budget.
I estimate our income at the beginning of each month from my business, Kirby’s business and our rental property and then subtract each bill from our total income. With the remainder, I’ll budget for variable expenses ($500 per month for groceries, $250 for gas, $80 for Odie, etc.), allocate savings to our sinking funds and put extra payments on our credit cards. The Budget Mom’s technique is to zero out your paycheque, but that stresses the eff out of me, so I leave my “rollover” amount for the next month, just in case.
Something that I really like about The Budget Mom’s system is that she creates small savings accounts for events like Christmas and birthdays, special, planned purchases and more. She calls these ‘sinking funds’ and budgets in what to save each month for each sinking fund. It becomes a non-negotiable, just like your mortgage payment or phone bill. For example, if you want to spend $1,500 on Christmas gifts, you would save $125 each month to that sinking fund so that you actually had the money come Christmastime, rather than adding more debt to your credit card. Smart, right?
Budgeting is definitely not for everyone. Kirby does not enjoy it one bit, but it’s something I feel the need to look at every day to feel comfortable. Saving money, paying down debt and making sure my bills are paid brings me joy. I know it’s weird, but that’s just me!
Budgeting has allowed me to better understand money and how I use it. It forces me to consider if I can actually afford to buy something or not, and pushes me to create sinking funds so that I know I have the money.
Do you use a budgeting technique?