For many people, the idea of sitting down to do a budget is akin to having a root canal or sticking hot pokers in their eyes. But for some of us, budgeting is fun, and, dare I say it, cool.
If you’re like me and love numbers and money, budgeting your expenses and so forth, whether for your home or for your job, is one of the easiest things you do. You don’t really sweat the budgeting process because it’s almost a part of you. Also, if you’re like me, you may just see numbers, math and science everywhere you go and ways businesses and individuals could do better with their money.
But I can’t spend too much time thinking about how to fix other people’s money problems while I still have my own! And to be honest, I avoided budgeting for a while.
I didn’t avoid it because I don’t like it; I avoided it because I was afraid it would confirm what I already thought: that I was broke and there wasn’t much to be done about it this month.
A strange thing happened last month. I got excited about money again! I got excited about saving, investing, retiring, and helping others understand how money works. Given all of that (and an unusually large cable/internet bill), I knew I had to sit down and create a budget. I needed to know how the following were going to get accomplished:
1. Paying the cable company over $700
2. Paying a portion of my cell phone bill
3. Renew my passport
4. Buy food
5. Get my monthly bus pass
Oh, and I needed to do this with a little less than $1,300 (my disability compensation).
Here’s my very simple process:
1. List my income at the top of the sheet.
2. Start subtracting expenses line by line in order of importance.
3. Know which expenses are paid with cash and which are paid from the checking account.
That’s pretty much it. I started with my disability compensation, and then I went down the list starting with that huge cable bill. But each time I subtracted something, I saw numbers higher than expected.
In other words, the reason I never really had any money was because I didn’t know where it was going. Now that I had a plan for the money, I was also able to budget in money to take my younger brother to a Baltimore Orioles game with money to spend on food and a couple of souvenirs! That would have been unheard of two months ago, and I would have laid awake wondering how I could get my brother and I to a game.
So when I sat down and really looked at my money, I really did have the money to do the things I needed and wanted to do for the month.
Did I get it right the first time? No! There were many revisions and items I had forgotten about. Were there things that didn’t make the budget that I normally would have spent money on? Yup! Starbucks did not make the budget. Sad, but sometimes it’s got to be that way (besides, I have enough coffee at home to last me for another few months without ever stepping foot in another coffee shop).
So, budgeting gave me a raise by allowing me to see where my money was truly going and how I had more than I realized. What an exciting feeling! I no longer feel broke and out of control.