Better Living through Budgeting

Budgeting is difficult! It takes commitment, determination, and sacrifice to make and stick to a budget. If, however, you’re able to stick with it, you’ll find that it has many benefits that lead to better living. My girl and I started budgeting a few years ago. We follow the “envelope system”.  Basically you give each dollar of your monthly salary a name or category (e.g. groceries, utilities, mortgage, etc.) then get cash for each (e.g. $500 for groceries). You use only the cash in each envelope, when the money is gone, you have to wait until next month and adjust your budget. It takes a few months to accurately project each category but once you get started you’ll see the results.

The first benefit of budgeting is that you no longer have to wonder, “Where did all my money go?”  This is because you’ve assigned every dollar you’ll be spending that month so there’s no second guessing what you spent money on.  Also at the end of each month, you may have a surplus or deficit in a few categories. In this case, earning more or becoming rich also won’t solve the problem. Having your money mapped out makes it easier to adjust your budget for the next month and helps pinpoint some things that aren’t essential in your life.

Many of these non-essential items may have been the result of impulse buys, you know, that pack of gum or candy bar at the checkout stand or that newly discounted television or pair of shoes. And when we do not buy, it gives a feeling of somewhat unsatisfied. While these examples are on the opposite extremes of expenditures, they illustrate another positive of a budget–fewer impulse buys.

Firstly, because you have a limited cash supply for each given category, any impulse spending will cause you to spend it faster.  Also, paying with cash affects you much more than a credit card. When you pay with plastic, your wallet doesn’t feel it right away, as you have weeks before your statement arrives. Conversely, when you pay with cash you feel it immediately!  This immediate feeling will help you really start thinking about making wise spending decisions.

And as you start making wiser decisions, I found that I was appreciating my purchases more.  Contrary to belief, you can still have fun and buy things you want on a budget. The key is to add them into your monthly plan. I set aside $25 per month for workout clothes and equipment. Some months I use all $25 and other times, I save it up and make larger purchases like new basketball shoes.  Either way, because I’m committed to my budget I find myself not buying things that are fun for a while and just end up sitting in my closet.

After about the 5th month of our budget, my girlfriend and I found that we had extra money each month.  We used this money initially to help pay off some old credit card debts we had. It was an awesome feeling to have paid off all our credit cards and not worrying about the huge interest payment or late fees anymore.  Now, we’ve even been able to have a small emergency fund. This has proven to be a great benefit for some of those unexpected expenses in life, such as car repairs or hospital visits.

In addition to the unexpected, budgeting has reduced some of the stress that can come with expected but forgotten expenses, like getting upgrading to a new car, vehicle registrations. $250 due in a month can be a difficult thing for many families, however, if you’re budgeting, you would’ve already had money set aside when this bill came around ($25 per month for 10 months in our case).  Knowing that the money is already available is something that reduces our financial stress.

Finally and most importantly, budgeting has improved my relationship with my girl. Often I try to make my point right and wonder how she is not acting submissive to my thoughts on spending. Many arguments we had in the past were rooted in money and pointing fingers at why the other was spending so much.  Sitting down together and openly discussing our finances and expenses has turned a potentially volatile subject into one of our most agreed upon.

We both understand that there’s gonna be some items that we both want each month and together we decide how to maneuver our money to make it work.  Sometimes there’s sacrifice, maybe no movie date night or one less weekend dinner out, but together we agree upon the monthly budget and stick to it 100%.  And that way, there’s no more finger pointing and arguing!

Yes, budgeting is difficult, frustrating, time-consuming and takes commitment.  But the benefits that I’ve received through budgeting make it a very worthwhile task.  I hope everyone will take charge of their finances and get the opportunity to experience the rewards of knowing where every one of your hard earned dollars is going!

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