Budgeting Tips

I have some budgeting tips that have worked for me. If you have any additional ones, I would love to learn them!

1. Use a computer spreadsheet if at all possible (Excel, Quattro Pro, etc.). This takes the math out of the calculations. If you remember something that needs included in the budget, you don’t have to erase everything you have written and redo all the math. This allows you to focus on the budget items instead of items like, “You punched that into the calculator wrong …”
2. Do the budget monthly! Every month presents its own budgeting issues. In the summer, you may be more focused on budgeting outdoor activities. In the winter, you may be more focused on paying for Christmas gifts and preparing for tax season. Irregular expenses also crop up – clothes for the children, quarterly insurance payments, quarterly tax payments for the self-employed, life insurance, school pictures
3. Work like crazy to fully-fund your emergency fund with 3 – 6 months worth of expenses. If you have this fully-funded emergency fund in place, then you can cease budgeting week-to-week. For those of you who are balancing paychecks and which bill is paid with whose paycheck in which week, you KNOW what I am talking about. Once you have the fully funded emergency fund, you can just sit down and write out all the checks at once! Talk about eliminating stress!
4. If you have upcoming expenses that you know are coming, start budgeting for them now. It is so much easier to plan for a $500 expense over the course of 6 months than in 1 or 2 months.
5. Every 6 months or so, hold a little longer budget session (
6. Keep copies of all of your old budgets. Once you have been budgeting for 13 months, you can always reference the budgets from that month in the previous year(s). That will really help you remember some of the irregular expenses you may need to be planning for.
7. Ensure that BOTH of you are messing with the budget. This is not a one-person show. It will not work nearly as well if only one person puts the budget together.
8. If the budget is not balancing this month, put it away for a day or two. Then, agree to get back together to review what the issues were. It may be that a simple solution is available and the wait may help you figure that out.
9. Use envelopes. It eliminates debit card transactions. My debit card transactions went down over 75% when we converted to cash envelopes. It also holds you accountable to the budget and absolutely prevents overspending. If you were to try one envelope, I would recommend “groceries”.
10. If the budget does not balance to zero, do not allow yourself to turn to debt to fix the issue. There has to be a point in time that you say “enough is enough – we have gotten poor results the old way, we are not going back there”. You will be tested on this one. How strong is your willpower to ensure you achieve freedom from debt?
11. If you have an irregular income, you should still do a budget. The lame excuse of “I can’t predict my income” does not work here. You can plan for the known part of your income and prioritize the rest of the expenses in order from 1 to 350 (if you have 350 expenses!). When you get income in, you pay down the list in order of your priorities. Once you are out of money, the end. Maybe next month.
12. While you are saving cash for a major purchase, the rigor of saving every single month for that purchase makes you focus on that item more. I have found that I can find AWESOME bargains when I have to spend 7 or 8 months saving for a purchase. Many times the bargain is 1/2 or 1/4 of the cost I had saved for the purchase. Talk about celebrating! This is budgeting working at its finest!

Those are a few of the things I have learned while budgeting. I welcome your tips!

BOO to the non-savers. Down with you!

From USA Today last week: $575 – On average, U.S. households overspent their incomes by that much in January!!! Below the main headline is a line that states The negative savings rate worries some. WOW! It worries some?????? My goodness, what is it going to take to wake up???? What we are doing is NOT WORKING!

Americans are stupid about money. We will spend money to buy Snow White and her 7 dwarfs figurines for our yard (I know someone who did this!), but not even save a single dollar!

If you can’t save any money, something is dreadfully wrong! Your priorities are out of order. What are you doing with your money that is more important than saving it? Don’t start that with that old line of crap like “I am paying for food and utilities.” For most people, this is a minor part of your income. Let’s see what is NOT a minor part … a brand new car(s), a new computer, a fine meal, a trip to Hawaii, a ski trip, new furniture, an addition to your house, a new big screen TV, a new Harley, fine clothes from the mall, a new digital camera, a new tractor, a new four-wheeler, a new barn, a new whatever …

These expenses that you pay on every month – were they needs? Really? You are really going to need to do some serious convincing to get me to believe that these are needs. Is it worth being broke? Is it?

Get real! Get angry! Do something about it! Become debt-free and save money! You can then buy what you want with CASH, give more money away than you ever dreamed, and save even more for the future.

Go make something happen. Take your finances by the proverbial ears and yell “THIS IS NOT WORKING!!!”

Need help? E-mail me with your questions.

You can do one or the other.

I’m so in debt. It is so hard for me to get out of debt. My husband is not on board with it. It is not possible for me to get out of debt. I have spent too long living on nothing so I am going to start living now even though I have to get it with debt. I deserve it. Our situation is really unique, and that is why we are in debt. We are going to get out of debt soon. I can’t get out of debt without borrowing money. I need money to make money, that is why I have debt. Debt isn’t so bad. If I can use someone else’s money, why wouldn’t I do that? If I can borrow the money at zero interest, it is like having free money.

Excuses. Lousy excuses. Here’s the deal. You can either whine about debt or spend money, but you can’t do both! For those of you taking “advantage” of such “deals”, I ask you Dr. Phil’s question: “How’s that working for you?” You are carrying debt. You are sending a lot of your paycheck out to pay creditors. If you were laid off tomorrow, how long could you make the payments? Are you happy with the answer?

When you have debt, it comes bundled with stress! When you stop using “deals” to your “advantage” and realize that the “deal” is that you are being taken “advantage” of, that is the moment of truth in which you truly realize that debt is dumb.


We want it now! We do not want it later. We do not want to wait.

Whoever said that patience is a virtue surely understood this. There are so many things we can get RIGHT NOW! I will list some:

1. College degree on-line in as fast as 1 year. This ad appears all the time on the internet. Right. I am sure that is a sound education.
2. A new car. You can go get one now. You don’t even need money. You don’t even need to have good credit. Even if you have declared bankruptcy, you can go purchase a car right now without any money. Right. I am sure that is a good decision.
3. A new TV, a new computer, a new I-Pod, a DVR, new clothes. Right. I am sure that this is a sincere need.
4. $500 right now! For just $639.50, you can get $500 right now – BUT, you the $639.50 check you write now will be cashed in 21 days. Right. I am sure that is a rip-off.
5. FOOD. You can go get food right now. Hardly any waiting. Taco Bell, McDonald’s, Hardee’s (why?), Burger King, Chick-Fil-A (Yes!), Pizza Hut, Arby’s, Jack-In-The-Box, Carls Jr, In-and-Out, White Castle (Yes!). Yet in the time it takes you to drive to the store to purchase this food, you could eat like a king at home for less than 1/4 of the price. Uncontrolled dining out can put you in the poorhouse.

Here is the deal. If you can not control the I-WANT-IT-NOW kid inside yourself, you will never be able to have financial success. The I-WANT-IT-NOW kid will rob you and your family of financial peace and disable your ability to use your money to build wealth, help the poor and broken, and to restore hope. Instead, you will buy a whole bunch of stuff that will disappear into the trash heap or sewer shortly.

I am not telling you to not spend money. I am just asking you to consider the reasons why you are spending money and to challenge you to look for better alternatives.

Budget Budget Budget

If you do not have a monthly written budget where you account for every penny you spend, your money will not be working for you at its maximum potential. You can argue if you want, but I have yet to see someone NOT experience an improvement in their financial situation when they implemented a monthly budget.

Besides the monetary impact, it also improves communication for a married couple. Not only are you agreeing on your immediate expenditures, you are also agreeing on your long-term financial goals. By doing this, you will know each others expectations and desires better.

Since it is a proven fact that financial problems negatively impact marriages and that budgeting helps finances, why would you not be budgeting? I believe it comes down to a few things.

1) Know-how
2) Want-to
3) Time

The know-how becomes quite simple after 3 or less budgets, but the first time you sit down and try to put together a budget, you will struggle. It is difficult for many people to even understand where all of their money is going each month let alone try to tell it what to do.

The want-to is a wildcard. If both partners in a marriage are not both advocating the budget, it will be tough to have the want-to. Want-to really develops when your financial situation hits a point that makes you both realize how important it is to have a written plan. It could be when you are nearing bankruptcy, or it could be when you have inherited a large amount of money. Either way and for everything in between, you need a plan. You may not think so right now, but on this subject it does not matter what you think. A written plan that is followed will always accomplish more than someone aiming at nothing.

Time is a big key. It takes time to think about where you are headed with your finances. It takes time to learn about your finances and the options that are available to you – 401(k), 403(b), SEP, Insurance, 529, Coverdell, mortgages, insurances, etc. News flash: Even if you don’t have a plan, VISA has a plan. So does Mastercard, Discover, American Express, the furniture store, your college, and the car lot.

So I ask you to resolve today to acquiring the know-how, to making it a priority and a want-to, and to make time to sit down with your spouse and put together a written plan. Put it on the refrigerator door. It does not matter what others think, they are still broke!

I was broke. Now, I’m not! It all happened because one day Jenn and I woke up and said, “We NEED a plan!”