Budgeting is a passion of mine, because I have tasted both the weight of debt and the freedom of budgeting. Let me start by saying that Ansen and I don’t have it all figured out. However, we have worked through a lot of budgeting with very small salaries for almost a decade now. And we want to share that hope with you! Not because we’re super awesome, but because we want everyone to feel that weight lift and see the light at the end of the tunnel. I want you to shed the guilt and shame you associate with your checkbook and/or credit card. I want to empower you to take charge of your finances rather than feel victimized by them.
And if you’re one of my college students, this is especially important. It’s never too late to start, but having a head start is even better! If you’re coming away from school with student loans, it can seem overwhelming, but budgeting will make it so much easier. If you think, “I don’t have any money, so I can’t budget,” then keep reading.
Let’s start at square one. What is a budget?
A budget is simply a plan. It’s deciding where you want to spend your money… before you spend it, even if you’re not actively earning (I’m looking at you college students). It is not a cage to keep you confined, rather, it’s freedom to know that everything is covered and yes, you can buy that thing! Having a plan removes the guilt.
Let me give you an example: babysitting. It can get expensive and until recently, we didn’t really have a line-item for it. But we realized that if we want a date night, we’re going to have to pay a sitter. And if we don’t budget for it, we’ll feel guilty, not knowing where the money to pay for one is coming from. But as soon as we carve out a place for it in our budget, the guilt is gone! Did we have to take a little from some other places? Yes. But in the end, it’s so worth it to know that at least once a month, we’ve got a date night. Guilt free!
A budget is a living document. It’s not meant to be rigid or written in stone. It’s meant to flex with your priorities. If you find yourself constantly going over in a certain area, you can adjust for it. If you find that saving for a car is suddenly a high priority and cable TV isn’t, cut the cord and put that toward your car. If cooking is just not your thing and you eat out a lot, that becomes a priority.
A budget allows your long-term priorities to balance with your short-term priorities. When Target splurges and Amazon impulses eat up your money, you need some checks and balances to ensure that you’re also still saving for that car, paying off that debt, or pursuing whatever goals you have. A budget can put that into perspective. Can you splurge at Target sometimes? Sure! But a budget lets you know when that splurge is going to impede your progress on your goals. Then you have a decision to make. Choosing one over the other isn’t wrong or bad, it just comes down to your priorities.
A budget allows you to put the big rocks in first. We’ve all heard the analogy of life with the container and the rocks. If you want to fit in as much as possible, you start with the big rocks, and then the medium rocks, then the small pebbles, and finally the sand. But if you start with the sand (aka Target splurges), by the time you put in the big rocks (the mortgage), you might not have any room. Accounting for those fixed expenses first assures you that you’re going to have a house to send those Amazon impulses to.
Next… Where do I even start?