Welcome to the “Budgeting Tips” series! These tips have proven extremely helpful in getting my own budget in order, and I’m confident they can help you too.
Budgeting Tip #4: Be REALISTIC
Perhaps nothing will destroy a budget from working effectively like being untruthful with oneself. If you have three children involved in three different sports, and yet you include nothing for restaurants (including drive-thru fast food) – you are lying to yourself! If you do not include enough money for groceries, hunger will drive you to the grocery store – even if it requires the use of a credit card.
If you want your budget to truly work for you, then you must be realistic. Employ the other budgeting tips of this series by giving every dollar a name, before the month begins, and force your Income minus Outgo to equal Exactly Zero all with reality in mind. This is, after all, your money to manage! Don’t do yourself a disservice by lying to yourself. Ensure there is some “fun” in the budget – restaurants, entertainment, and spending money. This is what will make your budget work for you – month after month – year after year. As the saying goes, “All work and no play makes Jack a dull boy!”
Here are a few ways I have been realistic in my budget:
- I include “Spending Money” for both myself and my bride – we get to use this money for whatever we want. Mine is usually spent on hunting, fishing, running, gardening, or food/snacks.
- We include “Dining Out” in our budget each month. We have agreed that this money is to be used ONLY when the family is dining out together. If I want to grab lunch by myself during a work day, I must fund that with my “spending money” because it is not with family.
- We save each month for Known, Upcoming Non-Monthly Expenses (KUEs) – these are expenses we know are coming, but they aren’t monthly. Since they are not regular bills, people can tend to forget about them. We’ve fixed this issue by saving for these expenses every single month. That way, when vacation time rolls around, the money is ready and available for use.
NOTE: This post is part of the “Budgeting Tips” series. Click HERE to read other posts in the series.