Budgeting Like a Pro & How Your Planner Can Help
Let’s talk about budgeting. It’s no secret that inflation is at a staggering high and your Ben Franklin won’t go quite as far as it did 10 years ago! Everyone knows that it’s a good idea to create and stick to a household budget. However, putting that into practice is another ball game! One of my favorite quotes by James Clear is:
“You do not rise to the level of your goals. You fall to the level of your systems.”
So let’s talk systems! Even if you’ve created the world’s most beautiful spreadsheet detailing the perfect allocation of your household income… Even if you’ve thoughtfully added monthly budget pages to your planner… Following through on your financial ideals is going to come down to the systems you have in place. If you’re wanting to hone your money habits, check out our best tips for creating a stellar budgeting system.
Step 1 = Save
The moment we receive a deposit in our household checking account, we take out savings. A certain percentage of every earned dollar goes toward long-term savings (investments, retirement) and short term savings (cash to have on hand for emergencies, medical deductibles, car deductibles, or unexpected income loss). We often set aside a smaller portion of each paycheck to save for any short-term family aspirations like a vacation or a big ticket item for our home.
If you’re not used to separating savings as soon as you receive a deposit, it might feel hard to part with that extra cash in the beginning. Trust me, it is worth it! Words cannot express the peace of mind that accompanies financial preparation. Our second baby girl was born on December 31st. As our hospital stay straddled 2019 and 2020, we were required to pay 2 full years worth of medical deductibles in hospital bills shortly after her birth. Since we were fully prepared for this potential outcome, we could place our focus on the excitement of the event, not the money it would cost to deliver her on a certain date.
*PRO TIP - Leverage compound interest by starting your long-term savings as soon as possible. Do your research to find a method of investment that can give you a greater return than a standard savings account (like a diversified mutual fund)!
Know Your Budget & Track Your Spending
This can be an overwhelming step without the proper systems in place! Here’s where your Golden Coil lifestyle pages come in handy. Our “Budget” page is perfect for outlining the big picture. It allows you to specify anticipated income & spending vs actual income & spending so you can see your net income at a quick glance after crunching the numbers at the conclusion of the month. (pictured below)
Our “Expenses” page is ideal for record-keeping in categories whose expenses fluctuate from month to month. Often these are the categories that leave us saying “oops!” at the end of a spendy month. Examples might include groceries, dining out, entertainment, personal care, and miscellaneous expenses. These are the categories that are critical to track and evaluate on a regular basis. Writing down everything you buy has a way of holding you accountable to yourself. It helps you to more clearly see which purchases were necessary and which were a bit more impulsive. (pictured below)
*PRO TIP - Set aside a fun treat, your phone calculator, and 1-2 hours per month for a budget recap. Review how your spending stacked up against your goals, and adapt your aim for the upcoming month.
Trim & Get Creative
If your net income is not where you’d like it to be, or if you have an ambitious financial goal that is currently out of reach, it’s time to TRIM and GET CREATIVE. Cancel the subscriptions you don’t absolutely need. Ditch convenience foods and eat out less. Choose hobbies and entertainment that are free or inexpensive. Carpool, bike or walk. Do a babysitting trade off with a girlfriend instead of hiring a sitter. Try giving yourself a haircut or a pedicure! Wash the car by hand. Become a DIY expert. Get to know your community and take advantage of free, local resources! If there are too many “must haves” in your budget, consider a side hustle! It’s never been easier to make a few extra dollars alongside a full time job than it is today!
We’d love to know… What are your tried and true tips for budgeting like a pro?!