How Wonderfully Simple Budgeting Can Be
November 28, 2022
When you think of budgeting, do you think of simplicity?
I sure didn’t.
You may currently be doing some form of budgeting. Or you may not and feel guilty about that.
Regardless, if you're reading this, you may be experiencing some form of money stress. You're afraid to look at your checking account balance, spend a lot of time trying not to think about your money stress, and feel guilty when you buy, well, anything.
When you understand what budgeting can be, and experience what it makes possible for you, it becomes quite simple.
Check out this quick video for a taste of what budgeting can look like!
To create, do it, and love it does require some time and effort, but only a fraction of the time you’re already spending in stress and reactivity.
Two quick caveats:
1. Budgeting is only a piece of monthly money management.
Yes, it's a big piece, but it's not the whole solution. Curious? If you missed this post, give it a read for more context.
2. Not all budgeting tools are created equal.
A flexible budgeting tool is a game-changer. There is a tool (YNAB) I use, love, and teach to clients, but any app that meets the following criteria gets 2 thumbs up in my book:
- Zero-based. You make sure every dollar you receive gets categorized/has a job. No more single-lump of money!
- Real vs hypothetical. You only allocate money once you get it. You forecast elsewhere (like on a spreadsheet).
- Flexible. Overspending happens, and sometimes you just want to adjust. Being able to move money from one job (category) to another is wonderfully…realistic.
With the stage set, let’s walk through a hypothetical payday. For extra fun, we’ll make it in the middle of the month, to show that budgeting is something you can do/start anytime.
You get your bi-monthly paycheck on the 15th. You quickly reconcile to make sure your budget app is telling the truth per the bank. You've been doing this throughout the month, though, so there are no big surprises.
Now you think through what you need your money to do for you before you get more money. You assign actual dollars into these actual categories until you are out of actual dollars.
Note: If you’ve set up your categories to be organized and descriptive, this is incredibly easy. You may also want to refer to a spreadsheet you’ve made to forecast your money.
Review and assess. Have you covered everything coming up? Have you been realistic and even generous with yourself? Of course unexpected things will still come up, but this exercise will reduce your number of financial emergencies.
Spend according to your plan. Note that this comes at the end of the list, not the start. Too many budget tools are just spending trackers. As a spender, I never found these to work. They only kept me reacting and feeling guilty! The magic in budgeting is in the planning.
That's it. Rinse and repeat. Adjust, allocate new money when you get it. Spend guilt free.
This is the sort of budgeting that can take just a few minutes per day, once you have it humming along. And it's time much more happily spent than the stress of mentally juggling everything!
I had a sticky note on my wall that said "Simplify the logistics, complicate the dreams." By "complicate," I just mean to dream bigger and explore more involved goals and projects.
And you can do so when you simplify the habits and the systems of your life. Otherwise, your best energies go unnecessarily toward the maintenance of minutiae—and that doesn't feel great.
Get habits and simple systems on your side and your best energies can go toward your dreaming and planning and serving—all things that feel great.