4 Steps for Intentional Spending…You’ll Like This!
August 3, 2016
I’m baaaaack… from a glorious ten-day vacation to Montana. What a place! Honestly, words can’t really capture the beauty of that state and particularly (I’m biased) the Gallatin Valley. Memories include accidental berry picking on a casual hike, mountain biking a couple times, floating the Madison River (including a super fun water war between the rafts and tubers), making music as a family, a home-cooked breakfast and late-night campfire outside my grandparents' place up Bear Canyon (two separate events; the breakfast included pancakes made from wheat ground into flour that morning), Settlers of Catan game nights, hiking the “M”, Pickle Barrel ice cream and sandwiches, baseball at the park with a dozen of my 50ish cousins, and the 58th (?) Annual Burnett-Oler Reunion over the weekend. The definite highlight of that remains the family dance. Just as words can’t really describe the beauty of Montana, words can’t really describe how much FUN we all have at that dance. Maybe I’ll try it, but squeeze it into another post:)
So, basically, I’m back. From vacation. And have some thoughts to share about making budgeting* work. I have a “Vacation” budget category and have kind of a mental list of which vacations I have coming up and how much I need to be saving for them. I had approximately $200 allocated for this trip to Montana but hadn’t been specific about how much I would need for gas, how much for vacation food, entertainment, reunion donation, etc. So all The Vacation Needs just kind of swirl around and when I need/want to buy something on vacation I just dip into The Big Pot of Vacation Money.
On vacation this 100% lends itself to overspending. The good news is I stayed within the overall budget and didn’t have to transfer money in from other accounts. However, I could have spent less money on this particular vacation and put it toward something else (like the VISA card with a bullseye on it). Basically I could’ve been and could be more intentional with my vacation spending. Being intentional – in advance – with your money is like THE big principle of budgeting whether it be for a Vacation category or for your big household spending plan. Following are 4 general steps to getting intentional. You’ll see that #1 gets the most attention which means a) it’s important and b) I may blog more about the others later:)
You’ve got to put some specific labels on what you need your money to do for you. One of the things that undermines this is lumping your monthly spendable income into one BLOB and your monthly expenses into another BLOB. Let’s say you have $1,000 each month for groceries, gas, gifts, clothes, entertainment, eating out, vacation, personal care items, household cleaners, dry cleaning, etc. If you don’t get specific about how much each of those clamoring hungry birds (picture robins nest with baby birds in it, all wanting the worm) get, some of them get more than they probably really need. That above list turns into something like this groceriesgasgiftsclothesentertainmenteatingoutvacationpersonalcareitemshouseholdcleanersETC.
No one wins with nebulous. It doesn’t work for goals, it doesn’t work for compliments, it doesn’t work for expectations and it definitely doesn’t work for making your money work for you. So break that $1,000 in advance into chunks you can manage, figuratively and literally.
groceries – $380
gas – $100
gifts – $50
clothes – $80
entertainment – $40
eating out – $70
vacation – $50
personal care items – $60
household items (cleaners, postage, etc) – $80
dry cleaning – $20
etc. – $70 (I do believe in having Random or Float or Etc categories since I’ve found it impossible to anticipate every.single.thing.)
Once you have this down on paper you can do some adjusting and start talking with yourself with questions like: “I’d like to see a bit more in the grocery category, so which categories can I cut back by $5-10?” Then you start shuffling money around and dropping a couple bucks here, adding it where you need/want it.
Step 3 (a-c):
Remember and look at those category balances. Spend. And then track those expenses against those category balances.
Be flexible and adjust your categories in order to keep them all in the green or black or whatever color your tool uses to indicate GOOD, POSITIVE NUMBERS:)
Thoughts? Does this feel doable? If so, why not? I’d love to hear your experiences or thoughts! And I’d also love to remind you: you CAN do this and like it!
*still looking for a replacement word since I’ve had recent experiences reminding me just how much people loathe that word:)