According to authors Brad Hewitt and James Moline of “Your New Money Mindset: Create a Healthy Relationship with Money,” “many people find they stop worrying about having enough when they start planning. To be sure, that includes taking care of our own needs and bills. A realistic plan makes sure those items get paid. That alone liberates us from numerous worries and leads us to feel more relaxed about what we have and what we can give. We don’t have to feel guilty about spending on ourselves or fretful about giving too much to others, because we have planned for it.”
There are a few ways to budget. Honestly I think the best option for you is the one you will actually use. Some options are very detail oriented. Every. Single. Thing is accounted for. As I mentioned in my financial goals post one option available to you is Dave Ramsey’s free budgeting app “Every Dollar.” Since Dave believes that you should tell every dollar where to go, he offers an extremely detailed, comprehensive approach to budgeting. Another detailed approach is the “Mint” app, which also accounts for all the little details. I’ve used this one before and it covers pretty much everything, as well. I think these are great options especially if you are working to pay off debt as they give you a very clear idea of how much money you have to put towards paying off your debt each month.
While the above options work really well for some people, others feel quite stifled when it comes to such a detailed plan. They prefer a more simplified approach that enables some flexibility as different things come up month to month. One option that I find freeing is the 50 - 20 - 30 rule from author Dan Buettner of the instagram account @bluezones. Dan’s approach says you should plan to spend 50% of your income on needs, 20% on savings and investments, and 30% on your wants. This gives a little bit more flow to your spending allowing for things like gifts, or car maintenance which might not come up every month. Dan’s instagram account also gives tips on healthy living from his studies of centurions around the globe. He offers a very comprehensive approach to life in general, not just your finances.
Another option to consider when creating your budget is to budget weekly instead of monthly. The app “Weekly” helps you break down your budget into smaller terms. Instead of looking at a whole month you can look at one week at a time. This ensures you are checking in weekly giving you the flexibility to adjust as needed more often than a monthly budget.
Whatever your preference, this is the month to get it all down on paper or in an app. Remember you can always adjust as you go, but let’s start this new year with an idea of what our finances look like so we know what we can spend each month. As Brad and James have found, “careful planning can make a difference in the well-being of people who are insecure about their future - the more they plan, the less anxious they feel, the more they can live for today, and the more generous they may become with all they have and are.”
And don’t forget to budget in some money for organizing your home each month! 😉
XOXO, Kylie