There are so many different budgeting styles, from Dave Ramsey’s Envelope method, to basically nothing. A typical budget has never appealed to me, and honestly it flat out wouldn’t work (more on that in a bit). But we do have a budget of sorts, something that works for us, and that’s really all that matters.
I have a question for you. If I asked you, would you be able to answer in less than 30 seconds how much you spend on average a month for groceries, gas, eating out? Could you tell me what your average monthly income is? Many people cannot, because they do not know.
Everywhere people are in debt; college loans, credit card debt, tax debt, medical expenses and house mortgages can really eat up a paycheck. Leaving one with nothing to live on, creating more cc debt.
My honest belief is that no one can get out of debt or remain debt free without a plan. That plan involves knowing where you are in your financial situation.
I use a desktop program that I shared about here, to keep an eye on our income and expenses. At any given time, I can log in, enter my last receipts and deposits and know exactly how we stand financially.
I don’t have a traditional budget. We buy our meat directly from farmers and enough at one time to last us a year. In the spring/summer I still have to buy some produce for canning and freezing, because our garden doesn’t produce enough. So some months our grocery category shows that we spent a lot, and other months show a nice low number. At the end of each year I can pull up a chart that shows me exactly how much we spent on food for the year, and it shows how much we spent eating out.
Some months I buy nothing for the house, and other months there may be large purchases. With some budgeting styles that would never work, but for us, we have figured out how to make it work.
Here is what we do. We track our income and our spending. I know on average how much we spend each month in different categories.
I can look at my charts and know that money will be tight this month due to (insert anything that could cause it) and I know to put big things on hold. Other months I look at our charts and Jason and I will decide that this is the month we will fix the car (or anything big that’s been needing done).
We no longer have cc debt (Jason had a little when we first married) and our vehicles are paid off. But we still have the mortgage. Each month I have our bank set up to automatically transfer x amount of dollars to our savings. In my charts, this is automated as well. So at the beginning of the month this savings transfer shows up in the bills column. It never shows up as money to spend, but as money spent.
By that method alone we we have managed to save a good deal. In the past I would send any extra money from the month into the savings as well.
But, we created a plan to pay off our house as soon as possible, and since interest charged is far more than interest earned, we decided that any extra that we have at the end of the month needs to go towards the house instead of savings.
Budgeting Styles: Creating one that Works for You
Anyone can budget. You can follow a program to the letter, or you can look at different budgeting styles and create one that works for you.
You can create your own budgeting style by doing the following:
- Get all of your financial info in one place.
- Decide how you will track both your income and your expenses.
- Learn where your money goes each month.
- Set goals.
- Create a plan for those goals.
The most important thing when considering budgeting styles is to consider how your brain works. If you are hands on, envelopes may work better. If you love numbers, spread sheets may work better. If goal keeping is hard for you, set up a rewards system.
Remember, there is no one budget style that is better than another. The best budgeting styles are the ones that work for you!
Budgeting is how you can achieve your dreams. No matter what your dreams are, I truly believe that they can be possible. Know your money, set your goals and achieve them. Nothing worth having ever came easy, but it will come if you plan for it.
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This is a sponsored conversation written by me on behalf of SunTrust Bank. The opinions and text are all mine.