How to create a budget – for those who hate to budget

When it comes to creating a budget, sometimes I think I would rather get a root canal. Am I the only one?!?! Why is it so hard to sit down on a regular basis and actually put together a plan to live on less than I make? Maybe it is that inner child, crying to get out and go shopping. Maybe it is the rebel in me that doesn’t want to be told what to do – even if it comes from myself. Whatever the reason, budgeting is ranked about 116th on  my list of fun ways to spend a Saturday night.

Making a budget

Here are six tips I have found to be helpful in my own journey of learning how to create a budget that I will actually stick to. These budgeting tips are perfect for beginners…and those of you who are like me and would rather suffer at the mercy of my dentist than sit down and think about my money.
  1. Sit down and list all your monthly bills
    • this is everything that you know is coming and when it is due. So your electric and/or gas bill, car payments and car insurance, cable (if you still have it, why?), Netflix. Everything, I don’t care if it is a $400 car payment or your $11 Netflix bill, it all gets listed
  2. Figure out what you have left and live off that
    • Gone are the days of putting your groceries on your credit card, gone are the days of handing the cashier your debit card and hoping it clears – now you are going to be in charge of how much you are spending on a daily and weekly basis.
    • On each payday, figure out how much is going to bills, and how much is going to be your discretionary spending. Your check is 1500 this Friday and your mortgage is 1200, this gives you 300 to spend for the next 2 weeks. In that past you just assumed you didn’t have any money and so you used your credit card to buy groceries – at 14% interest. Stop that! Use cash and agree to live off spaghetti and butter chicken instead.
  3. Live on less
    • I love Dave Ramsey, I really do. But all of his books are based on the premise that you will have plenty of left over money each month. I wish! All of his budgets have savings and debt payoff at the top of his budgets and then you figure out what you are going to live off of. But I live in the real world. Where adding up the groceries in my cart as I am shopping is my reality.
    • Yes, I choose to live off of one income so that there is always someone home with our kids. Yes, I could go back to work full time and never have to pinch pennies at the grocery store. But in exchange I would miss out on all those precious day-to-day memories, and I will never get a second chance on those again. So instead I choose to live frugally.
  4. Stop digging the hole!
    • I can still remember the first time I heard this statement at a Saturday afternoon financial workshop and it really stuck out to me how profound it was.
    • At the time, my 20-something single self was digging at a record pace, and couldn’t seem to stop. I remember talking with a very dear friend who had a weight issue, she said she knew she needed to stop eating but couldn’t. I remember saying, my addiction was the same exact thing but nobody could see my symptoms – because they were neatly hidden behind my many credit cards (and super cute outfits).
    • Spending addiction is a real thing, and when you need to protect yourself from yourself you sometimes need to get drastic. Even now, when I am not feeling strong enough to say no to spending I will avoid places like Kohl’s and Target, similar to a recovering alcoholic staying away from the local bar. Stop digging.
  5. Where can you cut?
    • Did your budget work out perfectly? The amount coming in is more than the amount going out? Doubtful. Otherwise you wouldn’t have chosen to read this article! If you are like the rest of us mere mortals, likely your expenses exceed your income. Join the club.
    • What can you do? Cut the daily trips to the latte stand? Sacrilege! Unless you are literally going every single day, I am not going to suggest this. And you will likely see me with a cup of coffee from my favorite local stand every now and then! But if you need a single cup every morning before work, invest in a Keurig and make the lattes a treat instead.
    • How many magazines are you getting each month? Can you cut that to one? I love flipping through the Real Simple magazines and when I was first cutting, I stopped all magazines, cold turkey. Now my mom gets me a subscription to Real Simple as a birthday gift each year. She knows it is a treat I am not choosing to get for myself and I still get to browse the amazing pictures of homes I will never be able to attain!
    • Why are you still watching cable? There are so many choices out there these days, and I have probably tried all of them. To see my review on what is out there, check out this article. Right now, we are simply using Netflix and Amazon (which we had back even when we had cable!) and we upgraded our Hulu from the $7 package to the live TV option which is $40. Way cheaper than cable!
    • Keep cutting until what you are making from your job is covering your expenses. Again, I love Dave and his simplistic ideas that everybody has $1k to start their emergency fund. But some of us are just trying to figure out how to stop the hemorrhaging of money each month. This is going to take time to turn around the Titanic, but you can do it and hopefully this website can help you without worrying that I am going to suggest re-usable toilet paper (barf!).
  6. Do your homework
    • If you are serious about getting out of debt, living frugally, and changing your family tree (to quote Dave!). Then you need to do some homework. When was the last time you read a book that didn’t end with the guy getting the girl? I am not saying you can never again read for fun, I love a great Tom Clancy action thriller just as much as the next guy. But sprinkle in some personal development books as well (we used to call these self-help books!).
    • A few of my favorites are: Richest Man in Babylon (very quick read, but don’t miss the hidden metaphors!), Financial Peace Planner (yes, he is extreme but it is good old fashioned solid advice your grandmother would give you….and he promises to keep his teeth in!), finally I also love Millionaire Next Door  – this book was so eye opening to me as a recovering spender. They do a phenomenal job of showing you that you can either live like a millionaire or you can actually be one – but very few people can do both in one lifetime (it usually takes multiple generations to get both).

Budgeting tips

Here’s the thing, I have taken the time to “make a budget” for my life about 65,000 times. It’s not necessarily making the budget that will all of a sudden make you live frugally.
The key is to change your daily habits so that you make the right choices based on your financial situation. I don’t ever like saying “we don’t have the money for that” instead I like to say “we are not choosing to spend our money on that right now.” See the difference?
It is about making the choices for yourself and your family every day. Rather than being the victim, you are in charge of your own choices. I also like to end with “right now” as it implies that things might change. Call me the ever-optimist but I always seem to think that next month is going to be better and I am going to be able to afford the things I want.
Use a monthly budget template to streamline your processes. Paying bills is something we have to do every month, whether we like it or not. Even if you have most of your bills on auto-pay, you should still do this step. Sit down each week (or payday) and make sure that they did in fact charge you, that the charge went through, and that it was for the correct amount. Even if all you are doing is checking off your list, you need to be paying attention on a regular basis.
I love Dave Ramsey, I really do, but we don’t all make 45K a year, and budgeting isn’t going to solve all our money problems. However, we can’t make progress without tracking where we are going. Our budget is simply our road map, telling our money where to go each month. Once your monthly expenses are less than the income coming in from your job, you can start to make progress on the rest of his baby steps by adding in a little side hustle or two.
I have written a few articles on my journey here, sometimes it’s easier to make more money rather than cut more. Also, I have shared my experiences with online income sources such as Rev transcription, Wyzant tutoring, and I intend to keep adding as I find more ways to increase my income from home without paying for day care or missing out on all the fun after school activities. Stick around, let’s do this journey together and make a budget to work towards living frugally and still have fun!