Budgeting is easy and will change your life. I used to think when the month commenced; I had to guess how much I needed for each monthly expense. It’s much easier than that. I’ve tried many budgeting programs and finally found one that is easy and works called YNAB (acronym for “You Need A Budget”). I took time to watch a few webinars and within one week, I was budgeting successfully. Our first payday after the webinars, I assigned each dollar a job, as YNAB instructs. There was not even one penny that didn’t have an assignment. Think of these little jobs as virtual envelopes holding a portion of money for each expense. Budgeting is flexible too. If I overspend in one category, I can take money from another category. For example, if I spend $10 more on groceries than I had budgeted, I may remove $10 from the clothing category. Most Americans live paycheck to paycheck and they don’t account for future expenses. Many times, my husband and I would see we had money left in our accounts before the next payday and we would think it was there to use on anything. Now that we are assigning each dollar a job from payday, there shouldn’t be money just left for using on anything. Sometimes at the end of the pay period, I feel we are living tightly, but that’s because we are accounting for all the upcoming expenses (like vacation in four months, or sports fees in the fall). We always dealt with all of our expenses as they came along without planning. I can’t wait to take our first vacation, where we won’t even feel it as an expense.
5 Main Reasons Budgeting Will Improve Your Life
1. Less Stress!
You will be prepared for future expenses. For example, I know my roof needs replacing in about two years. I also have an idea of what it will cost. You can create a category called “roof” or home maintenance and start saving. I’m currently saving $96 biweekly for the next two years so I can pay cash. What about car replacement? My oldest will be driving in two years. I will likely need an additional car, so I’ve created a category and I’m saving biweekly. It’s not necessary to have a car payment.
2. Your monthly expenses will likely decrease.
The first month I began budgeting, I started caring about our expenses and analyzed each one. I eliminated the expenses we didn’t need and modified or negotiated our necessary expenses. For example, I cancelled Onstar services and satellite radio for my car ($35 savings). Then I called my cell phone company and realized I was on the wrong plan for my family’s needs and saved $58 per month by changing plans. Three quick phone calls saved me $94 per month. I would have never initiated this if I hadn’t been tracking our expenses.
3. You will change the way you spend.
At the end of our first budget month, I realized my husband was spending approximately $275 per month at Wawa (convenience store). I sat down with him to determine what he was buying. My goal then, was to keep him out of the Wawa, so I bought the things he needed (wanted) in bulk. He was in agreement except for the bacon chicken ranch wrap he was sure he couldn’t recreate. I begged to differ!
4. You are the boss of your money. It’s not the boss of you.
You don’t have to be a millionaire to be in control of your finances. You decide how each of those dollars are spent. It will give you a piece of mind and when you have your next emergency, you won’t need to create debt to resolve it. After all, you work hard for your money, so make it work hard for you.
5. Debt is not necessary.
Americans have been brought up thinking debt is normal and expected. Get rid of it and budgeting will help you make a plan and stick to it.
I strongly encourage you to start budgeting, whether it be with real white envelopes under your mattress or using a program like YNAB. YNAB allows you to try the program free for 34 days, and if it meets your needs, the program costs five dollars per month or fifty dollars per year. Most people who begin using the program save $200.00 in the first month alone! Happy budgeting!