I use to think I knew what a budget was. Truth is, I had no idea what I was doing. In fact, I was ruining our finances.
Do you know what a horrible budget looks like?
Don't LOL too loud.
My old way of budgeting was to list all of our fixed expenses weekly (my husband got paid weekly), come up with a total, and spend all the extra money however we wanted.
The worst part: I didn’t even account for groceries, only invoiced bills. We had to survive on whatever was left over.
That, my friend, is a recipe for financial disaster. My idea of budgeting was to write down all of our expenses in a little book and determine what needed to be paid for each week.
Basically, our budget looked something like this . . .
Internet $89.00 / $501.00
So, for the week of January 7th, I needed $500, and the rest I would use for gas, groceries and complete redonkulous spending.
Holy Hannah, no wonder we were living paycheck to paycheck and spinning our wheels!
I remember saying to my husband once that we didn’t really have any money left for groceries that week. His reply, “Food is a necessity. Why is that not in our budget?” I charmingly responded, “Because that's not something you budget; it’s just something you spend every week.” The conversation went downhill from there (and I can’t believe I just admitted this).
So, why am I sharing this humiliating narrative?
Because if a complete money moron, like me, can turn her financial story around, so can you.
Today I am a Budgeting Ninja. I don’t say this to brag but to prove that if I can get a handle on our finances, you can, too.
It can feel overwhelming to start on the path to money mastery. But, how do you eat a cheesecake? One slice at a time. It takes baby steps. Remember, Rome wasn’t built in a day and I still have days when I make bad money decisions. Perfection is an illusion; the key to success is to always keep moving forward.
How do I budget today?
Today, things are completely different for me. In fact, getting control of my budget was key in paying off over $109,000 debt in one year.
I now use Dave Ramsey’s free software EveryDollar. Dave’s budgeting theory is to account for every single dollar of your income. Every month you have zero left because you have told all of your money exactly where it is going.
Why is a budget so powerful?
If you don’t tell your money where to go, it can easily evaporate into thin air.
Money is a necessity to survive. It is so important and yet so many people continue to spend it without really knowing where it is actually going.
Worse yet, people are going into debt every single month, and for no real reason.
Let’s think about this for a minute. When you go on vacation, do you have a plan? How about when you throw your child's birthday party? Or for the most important day of your life? Do you plan a wedding? YES!
We plan for so many things, but so many people never make a plan for their money. A budget is a plan for your money.
You need to start treating your finances like it’s a priority in your life. Become the Chief Financial Officer of your household.
We make time for things that we feel are important in our lives. Finances are extremely important. Start investing the time in yourself and in your finances, and I promise you it can change your life more than you ever thought possible.
If you haven't yet, taken our FREE Money Mastery Made Simple mini course to start changing your financial story today.