Budgets can be a pain.
There. I said it.
Look, I’m not going to stand here and tell you that writing a budget is simple and painless. Sometimes everything falls into place and works out perfectly. Most of the time, however, life happens and we’re forced to watch in horror as our budget crumbles into dust.
Of course not every part of our budget is this complicated. But there are a few that stick out.
Restaurants- My weakness. My kryptonite. Oh how I love a Big Mac and a large fry.
Groceries- 10 things on my list, 50 things in my basket. Oops.
Gas- Let’s just go ahead and blame the rising cost of oil for wrecking our budgets on this one.
Fun money- Sometimes this category is a little too fun.
While you may have a different category or two that cause you to overspend, these 4 are the most common areas that throw a budget off course. So what can we do? I have a few ideas.
Break These Categories into Single Weeks
When we sit down to write our budget, it’s important to predict what we’re going to be spending. This can be challenging for the four categories we outlined above. How are we supposed to know what gas prices will be? Or how much our teenager will eat this month?
I often tell people to break these categories into weeks. How much do you think is a reasonable amount to spend in a week? How much do you normally spend on a single grocery trip? How many times do you go out in a given week? Once you pinpoint your numbers, multiply it by the number of weeks in the month and you should land on a good number to budget.
The main thing to focus on is reasonable numbers. Don’t make your number so low that you have no chance of being successful. At the same time, you don’t want to put a number that’s so high you’re neglecting other areas of your budget. Find a comfortable number that you know you will help you be successful.
Have a Miscellaneous Category
Every month, without fail, there seems to be something that comes up that we didn’t budget for. At this point, I’ve come to the conclusion that it’s impossible to plan for every little thing. We should plan for as much as possible, but there will (almost) always be something that comes up that we couldn’t foresee. Your child lost their jacket and it’s going to be 20 degrees tomorrow. Or maybe a coworker had emergency surgery so everyone is chipping in some cash for a get well gift.
That’s where a miscellaneous category comes in handy. This is your buffer category for all of those unforeseen items. That way when they pop up, you don’t have to rearrange your entire budget.
I recommend picking a small number, maybe $100. You don’t want it to be so high that everything is considered miscellaneous (like those shoes that are priced just above your clothing budget). Do your best not to use it unless completely necessary.
While it may not be convenient, cash is a foolproof way to stay in budget. The thing about cash is it’s practically impossible to accidentally overspend it.
Let's say you want to go out for dinner and you look in your restaurant envelope, but all you see is a lonely tumbleweed rolling across the bottom. What can you do?
The way I see it, you have two choices. You can ignore it, swipe your debit card anyway, and cause your budget to dip into the red. Or you can open up the pantry and decide what you’ll be cooking for dinner.
Think about it; have you ever met anyone that over drafted using cash?
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