October 1st, 2013 - Frugal Living - Budget, pt 1

Hello October!This month, my husband agreed to something we've been considering for some time. And I am bursting at the SEAMS in anticipation.  You see, he's agreed to take me on this trip. This trip of a lifetime - with magical wonder at every turn. That's right folks. He is taking me to Disney World! There's just one catch.   

We have to take the kids.  

I know. I know you are probably thinking, what kind of jerk would go to Disney without the kids? And, lucky for my kids, not this kind of jerk lol.  Anyhow, in anticipation of Disney (well, and the new baby), we have decided we ought to revamp our budget. We havent done so since we moved to Nebraska, and now that things are settled down, and we have made our home here, it's time. So, I think the month of October, we will have a budgeting month series - so we can all budget together. And maybe you can go to Disney as well!

Part 1, Budgeting your life

Budgeting is important. Everyone knows that on an abstract level, right? But why? Why is it SO important to have a budget?  There are a lot of reasons, actually, and we'll go through many right now. 

1.  It gives you power. 

This is my number one reason for budgeting. It gives you power in your life.  It lets you see exactly where you are at, and where you have come from. It allows you to see where you are going. It creates a road map for you to follow.

2.  It saves money

A given, obviously. When you track your money, you are more aware of where it is going and spend less frivolously.  (This is the part that gets you to Disney World!)

3.  It builds discipline and organization

A budget helps you know at a glance where you are at, and it holds you accountable to the commitments you have made.

4.  It can be a stress reliever

Often, STARTING a budget is stressful.  BUT once you get through the feel bad stage lol it helps you relax.  It shows you where you can cut back to create an emergency fund, and it helps to reassure you that you ARE in control, and you ARE making good choices.  It allows you to improve your habits and lessen your debt. 

The steps to starting a budget are simple. 

1.  Make a list of goals and values. 

     What is important to you in your financial well being? What goals are you working towards?  For me, some of these things were Disney! but also, reigning in unnecessary spending. Eating healthier, and more whole at home.  Knowing exactly where our money went. Bulking up savings.  Once you have established some values, you can make goals - I suggest short term to long term - 30 days, 3 months, one year, 5 years, and so on.  Long term goals are great, but starting with short term goals help boost confidence as you meet them shortly, and help keep you on track to MEET those long term goals because you have a current idea of where you are at. 

2.  Figure out your expenses and determine your income.

     Go through whatever method you currently have of tracking your money.  Determine what is coming in and what is going out. The check book register (yes, some people really do still have these lol), your spreadsheet, your online banking statements. See where you are spending your money.  Separate everything into two columns - fixed expense and flexible expense.  Here are some of mine: 

Fixed

-          Mortgage

-          Student Loan Payments

-          Daycare/school tuition 

Flexible

-          Gas

-          Clothing

-          Gifts

3.  Create the budget.

     There are a TON of resources online you can use for this.  Next week's post will be a detailed post on budgeting worksheets and creation, so stay tuned!

Enjoy!

~Danielle 

Enjoy this series, as it appears to come at a very appropriate time in history, as our nation shuts down its government over budget and healthcare conflict.