Budget, budget, budget. It’s become a mantra for me and my family. Because we’ve been so focused on our financial goals these past few years, I’ve become comfortable shopping within the confines of a budget. In fact, that monthly budget is now a big part of my comfort zone. Uncertainty about my family’s finances would be a big source of stress and fear, and our budget helps alleviate most of that.
Still, I realize that everyone isn’t as crazy about budgeting as I am. Budgets ARE limiting. They DO confine your spending. Like the following e-mail says, they’re NOT for everybody:
Q: I know my spending is out of control, but I am not sure where the problems are. I mean, there is never any money left at the end of the month, but I do not know where it went. Whatever you advise, please do not tell me to use a budget. I am just not that kind of person.
Obviously readers have gotten to know me very well, as BUDGET was the first thing I would suggest. But there’s more than one way to start saving money, so here’s how I replied:
A: Congratulations on reaching the point where you KNOW something has to change! Many people realize their spending is out of control, but do nothing about it. Instead, they hope the problem will resolve itself. However, inheritances and lotteries aside, it never does.
As in every area of life, you need a solution that works for YOU. If you feel constrained by a budget, as many people do, there are other ways to get a handle on your money. Here are three alternatives for getting your finances under control:
1. Decide in advance how much you want to dedicate to savings, how much to charity, and how much goes towards your bills. When each paycheck arrives, put the designated savings amount directly into an account you cannot touch. Do the same for charity and bills. This is known as “paying yourself first.” As long as you are not using credit cards, this system will keep you from spending the money you’d rather be saving.
2. A second option is to implement a spending plan. No, this is not a budget by another name. A spending plan gets you organized and lets you know how much discretionary money you have to spend. You can do a quick Google search for more detail, but here’s the basic explanation: write down all of your fixed monthly expenses, such as mortgage/rent, groceries, car expenses, insurance, etc. Subtract that total from your monthly take home pay and you’ll discover how much discretionary income you have. That money is yours to spend (or save!) as you see fit and without any guilt.
3. If all else fails, work with cash. Designate a specific amount every month that is yours to spend any way you like. Put it into an envelope. When it is gone, there is no more discretionary spending until next month!
If a budget feels too restrictive and you want more flexibility in your finances, maybe one of these other methods will work better for you. I’m Claire, the Afena blog mom. Thanks for reading.