Big Picture & Little Details

Life requires all of us to be good money managers, whether we’re interested in the subject or not. I’ve given a lot of thought to the subject of personal finance. As a result, my current hard-earned philosophy on money is simple. Live on less than what’s earned, in order to eliminate debt and build wealth. And with money, it’s best to stay aware of the big picture, as well as the little details. It all adds up.

That’s why this month, my 30-day personal challenge will focus on giving 15 minutes of attention to my budget every day. I’m a little behind on budgeting right now, and I want to catch up and renew my commitment.

Budgeting can be tedious. But it’s also empowering, because it allows you to consciously choose how your money is used, by creating a written plan, and then tracking what actually happens. Budgeting especially helps when setting and achieving big goals. That’s why it’s worth all the effort. I’ll briefly explain the simple budgeting system I’ve used the past two years.

Budget System

There are many valid ways to budget, and what works for each person is different.

What’s worked best for my family in recent years is a monthly budgeting app called EveryDollar, recommended by Dave Ramsey. It allows you to look at your budget in three ways: Planned, Spent, and Remaining. The app gives you lines to track your projected Income sources and amounts. It also allows you to plan amounts for Giving, Saving, and your spending in the categories of Housing, Transportation, Food, Lifestyle, Insurance/Tax, and Debt. Within each category, you can create customized subcategories. At the beginning of each month, you can estimate your income and how you plan to use every dollar earned to give, save, spend, or pay off debt. Throughout the month, you can manually track every transaction, so you have a record of how things play out. Each month, EveryDollar creates a fresh new customizable budget using your inputs from the previous month.

Budgeting has Been Life-Changing

I’ll be honest. Budgeting is not my favorite thing to do. But budgeting and manually tracking our money has been totally life-changing for my husband and me. We’ve improved our finances significantly, with the help of a budget, along with constant learning, planning, frugality, improved incomes, and aggressive debt payoff. All that’s left is student loan debt, and that will be gone soon too. If all goes to plan, we’ll be totally debt free, except the house, by summer 2019. So the wins are worth the work.

Someday in the future, once we’ve achieved some of our big financial goals, we might not need to budget anymore. But I think we’ll always track our expenditures. Having an awareness of where the money is flowing seems key to financial health.

Goals this Month

Right now, I’m behind by about two months on budgeting and manually tracking in EveryDollar. Life has been really busy, and I haven’t given the budget the attention it deserves. It’s the first time I’ve slipped this far behind on the budget in two years. I’m a little frustrated with myself. But during these past two months, my husband has still been passively tracking all our income, expenses, investments, and debt in Mint. Everything has gone fine without our pre-written budgets, but I do want to reengage this powerful tool and keep it up-to-date.

I’m absolutely committed to get the budget back on track with this 30-day personal challenge. All I need to do is give the budget my undivided attention for 15 minutes per day. I’ll go back and finish all our manual tracking for June and July, and get our August budget and tracking up-to-date. I’ll admit that doing a budget in retrospect isn’t really possible. So for the past 2 months, I’ll just be manually tracking the giving, saving, spending, and debt payoff that actually happened. I want complete manual records. I’ve already made some good progress on this. Then, before August is over, my husband and I will fully budget and financially plan for September. Back on track.

Budgeting can give you the control to change your personal finance picture in all the right ways. If you think budgeting is something that might benefit you on your financial journey, I encourage you to give it a try if you haven’t already.

Next Week – “Good to Great: Why Some Companies Make the Leap and Others Don’t” – Personal Development Book Review