3 Simple Budget Plans: Budgeting Protects the Finances
Budget plans are the beginning, but you have to be intentional with money if you are going to make a difference in the bottom line.
There is no way around it. You can write down as many budgets as you want. Graphs and charts can cover every wall. If you don’t keep up with what you are spending, it might as well be wallpaper.
You have to use the plan you make if you want the plan to make a difference.
In other words, you have to invest your money with intention – whether you’re buying a big item like a house or a small one like eggs.
Our family has been working hard to get completely debt-free for the last seven years. We have paid off all of our debts – except for the mortgage (and we are tackling that one almost daily). I work on our budget every couple of months, as our expenses or income adjust, but I still ran into trouble this last month.
It’s my own fault. I got lazy. I quit writing down all the expenses as we spent them. I just wasn’t concerned because I KNEW we had enough money.
My budget plans were sound, but my follow-through fell through.
It turns out that no matter how much money you make, you never have enough. We spent twice as much on groceries as I have budgeted for AND we spent about four times what we normally spend on entertainment (which includes eating out).
OUCH!!
Now, normally, it might not be a problem. But we also had two trips to the emergency room, two car insurance payments, and new tires for the van. Panic was the first thing I thought about doing. I took some deep breaths and remembered that I had started a savings account for just such emergencies. We were saved – this time.
Budget Plans Pro Tip: When you use the savings, the safety net is gone. You have to get back to the basics of your plans and also refund your savings.
I’m back to recording our spending. It’s important to know where the money is going, why it is going there, and whether or not it needs to be headed in that direction. If you don’t keep up with expenses as they happen, you may not be able to plug the leak before your boat sinks.
Simple Budget Plans
- Envelopes – write out all of your expenses and figure out the percentage of each item compared to the whole. When you get a check (or income) then you put the percentage of that amount into an envelope for each item. ONLY use what’s in the envelope for those items.
- Software – use accounting software to keep up with how you are spending your money (or there may be an app available).
- Use a checkbook register – record every penny spent in a register. You can start the month with your budget limit and then subtract as you go. The goal is to be in the black at the end of the month.
It doesn’t have to be complicated, but it does need to be measured. Without budget plans and keeping up with the budget usage, the finances can quickly go down the drain.
Stop the leaks before they happen.
What are your favorite tips for budget plans?
