When some people hear the word budget, it automatically puts them in a bad mood. It can be synonymous with restriction or confinement. When basically, a budget is just a plan for your money. Budgeting means you’re spending with purpose before the month begins. But many people view a budget as a restriction that will keep them from doing what they want.
But a budget doesn’t limit your freedom; it gives you freedom! It’s all about being intentional with where your money goes.
I’m not a financial advisor or an expert, but I have learned from life experiences and friends what works over the years. My book “Stop Playing with Momma’s Money” offers anecdotal fun tips on how to track your money. Budgeting does not have to be complicated or tedious; it just gives you a plan to spend your money efficiently.
Before creating a budget, ask yourself the following questions: When and how do I spend my money? What’s my pattern of behavior for spending? Where do I spend my money? What’s my emotional mindset when I’m spending money? The answers are vital to implementing and sticking with a practical budget.
Momma’s Tip 1:
Keep a credit card in your Bible! Cut up all of the other cards. Please don’t cancel the account because it can negatively affect your credit. However, I keep my card(s) in my Bible under the red words of Jesus to think of blood every time I go to spend, and that deters me from spending.
Momma’s Tip 2:
Assess your previous spending on a monthly or yearly basis. Collect all of your bank statements, credit card statements, and any other state where you have withdrawals. Sit at a desk, on the floor, in the basement, or on top of the roof, and use a highlighter to highlight all non-essential spending in one color and necessary expenditures in another color. Using a spreadsheet or a notebook, tally the essential and non-essential items, and you’ll get an overview of your spending, a critical part of the budgeting process.
A budget only works if you use it; otherwise, it’s a spreadsheet, a piece of paper, or something that you do just because it sounds right, and everyone else is doing it.
Momma’s Tip 3:
Pinch yourself when you go shopping for non-essential items or frivolous items. This suggestion is a wake-up call because sometimes we’ll go to purchase an item and see something else and want to buy it, so that’s when you pinch yourself just enough to wake up from your stupor.
Momma’s Tip 4:
Pay yourself first and make it automatic. Set up auto-deposit with one of your bank/credit union accounts and starting automatically depositing $10, $20, or even $5.00 if that’s all you can afford at this time. If I don’t see the cash in the account, I don’t spend it. Now I have several bank accounts where I have $50.00 here or $25.00 there going into them. If I get a little desperate, I can access those, but I’d say to my fellow budgeteers, don’t do it, or as Joe from Madea would say, “don’t do it I say.”
Momma’s Tip 5:
Muss do’s – Mortgage/rent, utilities, savings, and spending money(going out money, appetizers/drink money, a last-minute trip to the Caribbean money. This tip is for you to remember that you need to take care of the basics. Some people forget they need a place to stay. I had a relative that didn’t pay her electric bill to buy her child an expensive pair of sneakers. Well, she bought them and the next day or so the lights went out. She told her son, “oh well, at least you have fancy feet.” True story! Take care of the “must-dos” first!
Finally, budgeting is a conscious commitment to changing your financial future and lifestyle. It’s not a quick fix or easy if you’re not accustomed to this process or system. Give yourself time to adjust to the process, and if you slip up, don’t be too harsh. It can take several months for a new habit to become effective. Many of us are spending unconsciously and will need to adjust to this new process of tracking your spending. However, it’s well worth it when you realize you have an extra $20 for lunch or add to your bank account. It adds up significantly.
R.K. Lane is the author of the funny finance book Stop Playing with Momma’s Money; get your copy on Amazon.
Disclaimer: Please consult a financial advisor for additional help.