I didn’t always have a budget. As a student, I used to start out at the beginning of the month with a fixed lump sum of money, and try my hardest to not burn through all of it within the first week. As hard as I tried, I always seemed to come up short. It didn’t really bother me as a student, money was there to be spent, and I was more interested in soothing my exam induced insomnia than sticking to a budget.
Once I’d graduated, and started the terrifying balancing act of trying to pay rent, car payments, and a student loan payment on an entry level salary in an expensive city, I quickly realized that a budget was no longer in the “not necessary” category. So I went through the process of getting my first budget together.
Eventually, my budget evolved. My fiancé got in on the mix, we started pooling and tracking our shared expenses, and my budget went from the equivalent of cave drawings to a spreadsheet detailing where every last cent was to go.
As any seasoned budgeter will tell you, a budget is never “done”. It’s constantly changing to account for the different needs in one’s life at the time. I’m never “done” budgeting, and I think that’s one of the reasons my budget works so well for me. Here are some other things that help me get the most out of my budget.
Everything in It’s Place
In my budget, I have a category for everything. Here are some examples of the line items in my (and my fiance’s) budget:
In this section I have the following line items: rent, electricity, internet. All of these expenses are shared with my fiancé.
This includes insurance, car payments, and fuel. This does not include repairs.
These expenses are shared by my fiancé and I, we pay for them out of a joint chequing account that we both pay into weekly. This category includes entertainment (restaurants, alcohol, movies), groceries, house miscellaneous (for things like cleaning supplies, paint, and Christmas decorations), pets, our trip fund, and the emergency fund.
This category is fully funded by myself. All of my expenses including my cell phone, my Christmas savings, shopping, personal care, and (of course!) my debt repayment are included in this category.
By having a line item for basically every little category under the sun, I’m able to see exactly where every dollar of my paycheque goes.
Pruning, Shaving, Squeezing, and Funnelling
So what happens when my expenses change. What if my cell phone bill decreases $5 per month? Or my Christmas fund is fully funded and I no longer need to direct $30 a week into that account? Since I have every single dollar accounted for, it’s easy to funnel that extra few dollars into debt repayment.
This is the method I’ve used to boost my monthly debt repayment. I used to pay an extra $50 per week towards debt repayment. Now, 13 months later, that number is $127.50 per week. By inching my debt repayment dollars up, I’ve literally cut years off my debt free date.
Even better, I’m always on the lookout for ways to decrease my spending even by a few bucks. There are so many ways to decrease spending here and there, whether it’s checking to make sure I’ve got the most competitive car insurance rate, or finding ways to save on groceries, the possibilities for a more efficient budget are endless.
Take Things Slow
I didn’t go from being a terrible budgeter to where I am now overnight. It took a long time and I improved my budgeting practices slowly, over many months. When I first started budgeting, I was spending $700 per month on groceries. Even though I knew this was a crazy high amount for two people, I also knew that I couldn’t simply cut that number down to $450 and expect us to cope with that change easily. So instead, I walked that number back slowly. First $20 per month, then $10, until finally we reached a more manageable level. Using that gradual method, I can honestly say we barely noticed the change, but we’re now saving hundreds per month in that one category.
It Won’t Happen Overnight
Budgeting, for the uninitiated, can be a tough and frustrating process at first. It’s tough to instil these new and productive habits of monitoring and adjusting spending without feeling restricted, trapped, and frustrated.
By taking an incremental approach and easing into it gradually, it’s easier to stay motivated and reach small and manageable goals. This is how I’ve managed to budget successfully for the last few years, and this is how I’ve gone from a willy nilly spend thrift to a frugal penny pincher.
What little tips and tricks do you use to get the most out of your budget? Do you even have a budget? I want to know!