Alright, so I'm back on the budgeting kick. How's the progress so far? Some of you have talked to me in person, but I'd love for you to share below so others can see and be encouraged or, if you have questions, then we can all share the answers.
I am turning these into weekly posts, and may just call it "Mondays are for Money" or something like that. It's probably a good thing because Mondays are a fresh start to the week. Chances are the weekends can be the most tempting to break the budget, especially when you're out with your friends and you haven't cut that plastic up yet.
So, now you can wake up bright and early to some budget goodness.
Monday is April 27th, which means the new month is coming up. If you've been keeping up, you should have a buddy and a quick budget set. If not, catch up on the blog right quick starting here and join folk who are changing their lives for the better.
TWO MORE TOOLS
The quick budget is a good start, but in order to get serious about budgeting, there are two more tools for your arsenal:
- Monthly Cashflow Plan: Cashflow is an important concept to understand, but one that many of us fail to grasp. In short, cashflow is how money comes in and out of our accounts. It's typically broken down into income and expenses. Most of us get paid twice a month, but we have expenses many more times than twice a month. The monthly cashflow plan is a high level approach to how your cashflow will go for the month. The goal is to have a big fat 0 at the end, meaning that ever dollar that comes in has a planned spot for going out. This helpful form even gives you a suggested percentage of spending for each category that's fairly in line with general financial advice.
- Everydollar App: When I started with Dave Ramsey, it was just the forms. I created PDFs and would type in the numbers on my computer. I then moved to Excel. Well I learned that just recently Ramsey came out with an online budget tool and an app to go with it! It's called EveryDollar and you should sign up so you can budget through that. You have to enter manually all of your transactions, which is good, because you own your spending that way. It apparently costs money to tie your bank account to it, but I wouldn't recommend that. If you're budgeting the right way, you shouldn't have to tie it your account. Stace and I starting it this month, so we'll all be doing something new together!
THE BUDGET MEETING
The last week of the month is important for budgeting. If you're like me, you have a ton of meetings throughout the week and I'd say about 5% of them are actually needed, but there's one meeting that's most crucial and thankfully it doesn't even happen at work and you only need it once a month. It's a meeting of the minds, a clashing of wills, and a great gathering to plan joyously the month ahead.
It's the budget meeting!!! (Hooray Hooray, Clap Clap, Cheer!)
So here is how the budget meeting should go down:
- Same day every month: Make your meeting consistent and throw it on the calendar. Stace and I typically have done the last Thursday of every month.
- Make it as fun as a budget meeting can be: We've called it "Family Night" and have tried to make it fun. Yes, sometimes she has fallen asleep on the couch, but other times we've gone to a coffee shop, enjoyed some treats, talked, done the budget, and even planned our calendar of events for the following month. We would celebrate the small wins, like staying on budget for certain hard items like eating out, and we would get pumped when we saw our debt going down because of our commitment to the budget. It's awesome to see that progress, so don't downplay that and have fun.
- Come prepared: This is for you Nerds. You should come prepared for this time. That means you have to do a little bit of work ahead. If you are a Nitpicky Nerd, you may want to reconcile all your expenses with your budget. If you've been tracking throughout the month, this shouldn't be an issue, but some people like to do that reconciliation. I've done it a few times, but it isn't wholly necessary. As long as you know throughout the month where your money is going and how much you have left, you're good to go. Also, have next month's budget as ready as you can have it. It shouldn't change too much from month-to-month, but if you're just starting, these first few months will take a little bit more work until you get the hang of it.
- Communicate & Collaborate: Talk about how the last month went. What went well? What was hard about it? What changes need to be made? This is an opportunity to give the Free Spirit a chance to really speak into how the budget should look for the following month. You guys may want to shift some money around to have a fun date night or you may need to set aside additional money to go get some mani-pedis together (you know, if it's two friends doing this together).
- Own it. The meeting should end with both of you agreeing that the budget is good to go. If you are two friends with two separate budgets, sign off on each others' budget. At the end, it's something you have to own and stick to. Set it for the month and be done with it.
Once May hits, you should be money. The great thing about a budget is it gives you confidence with your spending for the month because you actually have a plan. If this is your first time, you will actually begin to see how empowering it is.
Let me know if you have questions or need more help. And tell me about your progress!