Wednesday, October 24, 2012

On Finances....Budgeting

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Today, I'd like to offer a little tip about budgeting that has really helped me.
Up until a few years ago, my pattern was as follows:  

1. Realize I need to reel in spending, decide to make a budget.

2. Sit down and make rough guesses as to how much I should spend in a few main categories.

3.  Go on my merry way.

4. Realize that I spend way more than my best guess, and not everything fits into the categories I listed.

5. See #1.

It was a vicious cycle that never allowed me to really improve my financial situation.  Then I started doing something slightly neurotic, but life-changing (financially speaking).  I began to record every single monetary transaction.  (Slightly neurotic is probably and understatement, because I even recorded cash transactions and kept track of when I got money form a friend for putting dinner on my credit card.  One time I found $20 in an old jacket, and I recorded that too).  After a month I had a realistic picture of what I actually spend on everything. After three months, I had a three-month average.  After a year I had a pretty realistic picture of the things I needed to plan for, including those sneaky once-a-year expenses like a rogue engine replacement or random trip to the ER for violent food poisoning.

I finally had the data I really needed to make a realistic budget.

If you're looking to do something similar, being neurotic really helps, but here are some other tips for accomplishing the same result:

1. Get a receipt for everything (not very eco, but useful for these purposes).

2. Use electronic forms of payment rather than cash, which is easy to lose track of.

3. Use a program to track your expenses - (Excel,, Quicken and QuickBooks are all great programs depending on how geeky you want to get with this).

4. Set aside an hour a week to monitor and/or record your transactions.  This may seem like a large investment, but if budgeting is on your to do list it's totally worthwhile.

5. Finally, at the risk of sounding overly exuberant on the matter, if you would like personal encouragement feel free to contact me.  I seriously love this stuff.

More on finances.


  1. Really good advice! I've been so bad at budgeting lately, mostly because I'm too afraid to actually know how much I really spend! But I'm totally in need of some budgeting tips so I'm going to see if I can start keeping track. Thanks for the tips :)

  2. I love that you love budgeting.

  3. I could benefit from this kind of mindset. I'm pretty certain I'd be shocked at just how much I spend. I don't obsess over it too much because I've been able to save up a lot of money, but I can only imagine how much more I'd save if I became more aware of my spending habits!

  4. great advice! i am the WORST when it comes to managing money. it's something i seriously need to get better at. that photo of the dog very accurately portrays my feelings on this subject :)

  5. Oh man, this is such great advice! I'm happy I have you as a blog friend, haha...the boyfriend and I are in desperate need of sitting down and hashing out our budget/expenses, especially now that I have started a small business (we keep putting it off). Thanks for this...yay motivation!

  6. Wonderful advice and ideas! The picture is worth 1000 words!! :)

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  8. Keeping track of your money is a clever way to budget your money. This way, you’ll know exactly where all your money is going. You will know if you’re spending too much on unnecessary things, and by doing this, you can make a realistic budget plan. This is also very helpful if your money came from a loan. You can keep a close eye on whether you're spending the loan for the exact same reason you got it in the first place. @ Sunset Payday