Updated: Apr 20
If you grew up, as I did, your parents never taught you much about budgeting money. In fact, not to reveal my age, but I remember first hearing the word “budget” in my middle school economics class that I just wasn't interested in at the time.
Boy, would I regret that!
I again came across the word in my adult life but thought budgeting was for nerds and budgets didn't really work. I was so wrong.
You know the saying, "Don't knock it until you try it", well it's true.
When I found myself in financial trouble a few years ago, I decided to give budgeting a try. As I was researching, I came across an article that rings true to the situation I found myself in.
I was all over the place when it came to my finances and was not holding on to my money even though I was not living lavishly.
I had to change my mindset and convince myself that I needed a change.
I tried budgeting because I literally had nothing left to lose. You would not believe the money I saved and the doors it opened.
I am convinced that creating a budget is the key to financial success.
But, I honestly was not thinking about any of those reasons at the time that I started budgeting, if I’m being honest, honest…… I wanted to buy a home.
So, what convinced me? The 3 major reasons I decided to start a budget and I think it will appeal to you are:
it allows me to know my money,
I hold myself accountable for my spending, and
it affords me the ability to save money no matter what I earn.
Know Your Money
First, create your budget in a way that works for your financial schedule, more important make sure you try it.
If what you're spending is more than what you're earning, "Houston, we have a problem!"
This is where the "Know your money" idea comes in.
So, let’s say you have picked your method of budgeting, you apply it and you don’t like what is staring back at you as is the case with me.
I had to ask myself some hard questions because the amounts I was left with after my calculations were depressing.
I had to ask myself,
How often are you buying clothes each month?
Why are you paying for cable because you are not using it often?
How much are you spending on eating out?
How many unnecessary subscriptions do you have?
These are all questions that budgeting helps you think about, I was literally throwing my money away on non-essential things. I had to make some serious changes.
Hold Yourself Accountable
They say when “you know better, you do better” and now that I had a number staring me in the face I had to hold myself accountable for my spending, this is another reason budgeting works.
You'll have to do some serious self-reflection during this process and you'll have to tell yourself “no” about a lot of items you've accumulated.
That’s ok because you’re ready!
But really, there are tons of ways you can reduce your expenses. In fact, after doing research, I came across an article by Dallas Cox that gives 35 ways to save money.
So here’s what I decided to cut back on.
I reevaluated having cable, switched to just internet and two streaming channels, and saved $100 a month.
I took a realistic look at what I spent on clothing, not based on need but on wants, and adjusted my thinking. I saved $100 a month.
Wait, it gets better!
I looked at how much my children and I ate out. I was a single mother then and would end up tired after a day's work.
But I had to keep in mind my goal and put my foot down on our fast food trips. At first, my kids didn't like the idea, but I stuck to my guns and started cooking our meals.
I switched from going out to eat 6 times a week to about 2 times a week. I saved about $200 a month.
Next, I looked at the grocery bill. I bought a lot of individually packaged snacks for my kid’s lunch.
I compared this to the cost of individually packing snacks myself and saved $50 a month on groceries.
I could not do anything about my car note and my rent. However, I looked into cheaper car insurance and tried to save money on utilities.
I found cheaper car insurance and saved about $50 a month there, but I could not do too much about my utilities because these bills fluctuate so much.
So if you were keeping score, I saved $600 a month just by creating a budget.
Now, this is based on my salary as a teacher in the state of Louisiana. That means I was bringing in about $1700 net worth twice a month.
But this can apply to any amount of money you bring home!
Save No Matter What You Earn!
So you may look at my salary and think, “Oh yeah, you were broke!”
I often look back and shake my head at my salary, especially when I think about the work that goes into teaching and the things teachers put up with, but that is a whole other story.
The point is I could save despite not having a large salary. I could also take what I learned and share it with others.
Major Take Away
Remember, the motivation to start a budget is starting with a goal.
You have to start with a goal when starting this journey, and everyone’s goal is not the same.
Don't compare your financial journey to others.
It was not until I put budgeting into practice that I realized budgeting was like giving myself a raise, and no matter what salary I made, I could save money.