Budgeting 101 - Moving On From Money...

Good evening again,

I think it is very important to discuss the fact that budgeting isn't only about money - it is much more about mindset; and this can take a while to really change... You may be watching the money, and tracking the money - but if you're not careful with the money, it will still win!

Do you understand what I mean?

Budgeting is not just knowing where you are spending your money, it's also about learning how to manage your spending; how to be more careful where you spend it. 

So, the key for me has been 'organisation'... 



Over the next week or so I will be going more into detail on what kind of organising I do to help with our budget, and how I do it; you can expect posts on menu planning, debt elimination and using the internet as a tool, freezer meals, simple savings, pinterest, seasonal shopping, cheap meals, and anything else that inspires me on this journey.



Now don't think they will all be separate posts, I don't claim to know enough to be able to write up an entire post on each single idea above - I will be combining these posts, and passing on as much information as I can on each item. I am also working on setting up a basic template in excel (or google docs) to be able to pass onto you for your own personal use, and I have a grocery list template and menu planning template, that I set up months ago and use on a fortnightly basis, which I will share with you in one of the posts coming (so stay tuned in if you're interested).



I am going to be working up to doing my own $21 Challenge from Simple Savings; so I will explain how this works, and document it here, and hopefully this will inspire you to do your own challenge as well - all in the name of saving money!



I think the key thing to learn with budgeting - is that money is here to work for you, and not you work for money... Budgeting is about using the money you do have wisely, and it's not about a set of hard and fast rules to bind you up. There are so many subversive belief systems out there on what a budget is; and the chances are you have believed a few of them yourself, and never even wondered about where these came from, or if they're even the truth. I know I have, and still do - at times it still feels too hard, and while I track our money, sometimes it still feels like we (read 'I') have little control over where it gets spent!

So it's time to shatter some of those myths, and start changing how we think about setting up a budget, and see it for the positive element it is ... I started off by looking up the meaning of budget online, and this is what it says:




budget

[buhj-it] 
 


noun
1.
an estimate, often itemized, of expected income and expense for given period  in the future.
2.
a plan of operations based on such an estimate.
3.
an itemized allotment of funds, time, etc., for a given period.
4.
the total sum of money set aside or needed for a purpose:
the construction budget.
5.
a limited stock or supply of something:
his budget of goodwill.
6.
Obsolete. a small bag; pouch.
adjective
7.
reasonably or cheaply priced:
budget dresses.
verb (used with object)budgeted, budgeting.
8.
to plan allotment of (funds, time, etc.).
9.
to deal with (specific funds) in a budget.
verb (used without object)budgeted, budgeting.
10.
to subsist on or live within a budget.

I read the first line, and saw it says 'for a given period in the future', and thought how interesting that was - I plan my money for a fortnight at a time, but I hadn't actually thought of it this way. I had initially thought I didn't do this at all, but I follow what is a called a 'Zero Based Budget' meaning every cent has a job and is accounted for; thus in reality I do plan ahead and direct where my money goes for the future. And if you are starting off on your journey - it won't be long until you can confidently say the same thing.

Now lets think through some of the myths we may be telling ourselves regarding budgeting, and dis-spell them here and now (I will discuss the ones that I used to struggle with, as I assume these will be fairly typical myths for most of us):

* Budgeting is TOO hard and takes too long

Budgeting feels overwhelming to begin with, and yes it takes time to set up and track initially; but once you're in the flow it doesn't take much to keep it up... and it's well worth the investment of time! Peace of mind does not have a price tag!

* I can't budget as I am no good at maths

Budgeting has NOTHING to do with maths! If you can use a calculator, then you can budget! Maths was one of my worst subjects at school, and yet here I am working in accounts - if I can do it, anyone can! It is more about perseverance and self-discipline, than it is about maths!

* I don't earn enough to budget, I can never get ahead anyway so why try

This is how we used to think and it is one of my biggest regrets - we made ends meet in Auckland, but believed we'd never be able to save; what a load of baloney that was, even if we'd have put away $20 a pay, we'd be in a far better position than we are now. But budgeting isn't actually about saving - it's about knowing where your money is going, and the peace of mind that comes from having enough aside to cover the unexpected... It may not be a lot, but every dollar helps, and it all adds up in the end. 

* I always over-spend and just can't do anything about it, I am a failure 

This is probably my biggest weakness - I often overspend on groceries, and if I do this a few times in a row I still get in a funk, and then give in and go on a spending spree. Eventually the credit card statement will bring me back to reality, and I then have to figure out a way to pay it back. I have started three budgets on YNAB, because I'd get myself tied into knots over not keeping it perfectly, and give up again - only to feel guilty, and re-start a fresh once more. This one I have had going for a few months now, and I am slowly learning what I am hoping you will understand a lot sooner than me - budgets are not to bind you up, and make you feel guilty; they are a guide. If you overspend one pay cycle, the next pay cycle is a fresh start... so relax, acknowledge you're not perfect and are going to make mistakes - and move on, without beating yourself up this time! Hopefully, as I learn this lesson here - I will be able to take it into other areas of my life as well!

* Budgeting means I have to give up my weekly coffee

All I can say to this is "hell, no" (sorry Mum)! If coffee is important to you (or whatever your vice is), budget it in, and make sure you don't miss out. Even when we were tight and couldn't afford to have pocket money each (which is now our coffee money), we'd still pop out for a coffee on the grocery money once in a while - it's called sanity! Budgeting is not about missing out on the important things (no matter how little they are), it's about using your money wisely so you still have some leftover for these kinds of things. Whether it be promising yourself a coffee if you come under budget with the groceries, or a girls weekend away, (or a hot steamy weekend away with your significant other) when you reach a goal - make sure you do set goals, and have rewards for reaching them (just make sure they're realistic goals)!

Our goal is Hawaii... but that's a story for another day 😉!

I hope this has helped you look at what myths you have quietly been holding onto, and given you a reason to debunk them!

See you next time,

Elizabeth
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