Tagged: how to budget

Part 2: How to Get Your Budget in Check

If you are ready and prepared to get your budget in check, you are in the right place. If you are landing here for the first time, I encourage you to check out Part 1: How to Get Your Budget in Check before continuing.

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In Part 1 we discussed the basics of getting your budget in order. Including, understanding your income, identifying your debt, and devising a plan to get your budget in order. In Part 2 we will take it a step further and discuss how to get your budget in check by identifying budget “killers”, executing your plan, and reassessing and readjusting your budget.

Let’s jump in.

Idenitfying Budget Killers

Once you have gotten a clear understanding of how much income is coming into your household, now is the time to identify the things that are killing your budget. We all have our vices and things we like to eat, drink, listen to or do at the expense of maintaining our budget. Automatic reloads on your Starbucks account could be killing your budget. $8.99 per month to an unknown subscription could be killing your budget. Stopping at Wawa every morning before work could be killing your budget.

Your responsibility here is to look over your bank statements with a fine tooth comb and identify the areas where you are spending excess. If you haven’t completed your free budget check up, it may be a little difficult to continue. If you have, it is safe to say your budget killers are the area in which you are spending in excess. Some of those factors we cannot change immediately (such as you rent or car payment), but others we can (entertainment, dining out). When you find the areas you are overspending in, you have successfully identified potential budget killers.

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Executing your Plan

Now that you have identified your income, analyzed your spending, and identified your budget killers, now comes the time to execute the plan. This is where things get rough! No one can make you follow through with your plan but you. What monetary goals have you set for yourself or your family? These are the things that will keep you pushing forward. To make it a little easier, put those goals up in a place where you will see them daily to help remind yourself of why you chose this path.

If you have allocated $20 a week to spend on coffee/breakfast items, I would encourage you to take that out as cash. This helps you to avoid going over in this budget category. We quickly forget how much we’ve spent when just slide that card! Measures like these are the things that you will need to put in to play to ensure you are executing your plan as effectively as possible. If you mess up one day, that is okay. Each day is a new day to get on and stay on the right track. Being in control of your budget does not occur over night.

Reassessing and Readjusting

At the end of each month (or as often as you’d like) you should reassess your budget and adjust as necessary. Many factors cause our budgets to fluctuate, that is why having a budget requires consistent assessing and adjusting. A budget is a living breathing document, not one and done.

To save your sanity, I’d only do this once a month. Reflect on your past month and see where things need to be altered. This does not mean increase categories where you are overspending! This means plan accordingly so you do not. For instance, if I am overspending in entertainment, I may preplan my outings with friends and not accept any additional invitations to events for the month. The power of “no” is your friend when it comes to keeping your budget intact. If you allotted much more to an area and ended with residual funds, you can move that to other areas of need. Neglecting to reassess and readjust your budget, will result in an unusable budget. One that will require you to start anew.

Now that you are all ready to get your budget in check, go out and dominate! Let me know what things you are doing to ensure you are keeping your budget in check and what tips you’d like to see to help you stay the course.

Keep doing (the best) you boo!

xoxo Lani

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Part 1: How to Get Your Budget in Check

Let’s talk about the “B” word. You need to figure out how to get your “B” in check. No not the one you may “accidently” call someone who cuts you off in traffic. The one that is hindering a lot of our lives but we refuse to talk about and dicusss. BUDGET !

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We are still in the first quarter of the new year, so this is a fine time to sit down and realize how out of whack your budget may be. My husband and I have been attempting to get our budgets in check for quite a while now. This year we took a leap, we are taking some budgeting classes, and we are going full course ahead to get that “B” in check. How are we doing it? The same way others before us have done it. If you’re prepared to make a change in your life and get some things on course for the future, here is how you can get your budget in check.

Understand your income

First, you need to understand your household income. You cannot adequately make a plan to get your budget in check if you don’t know where your money is coming from and how much. If you are single, this will be a little bit easier than if you are married. Married couples need to get a snapshot of the total household income, as well as independent owners.

For many of us “millennials” when we got married we threw out traditional roles and kept most of our money separate. No? Just me? Okay. Trust me, it is so hard to account for every dollar when everyone is doing their own thing. You are trying to see the big picture but you are missing pieces of the puzzle. Get all the money in one place to fully understand your earning power. Once you understand your income, you can identify debt and identify the budget killers.

Identify debt

Next you need to identify your household debt. Debt is the enemy of budgets! We all have some debt, and we need to be frank about how much we owe. This is a crucial part in getting your budget in check. Identifying you debt allows you to create a plan of attack to irradicate that debt. Think about it, the longer you owe money the longer you will not have the money you thought you were earning.

Take that number and write it down, put it in a place you and your spouse see on a daily basis. This is not to remind you of the debt shadow looming over you head. But this should serve as a reminder of the goals you have to eliminate your debt and will encourage you to stick with your plan, stick to your newly planned household budget.

Devise a plan

If you have taken this time to understand your household income and identified all areas of debt, you are well on your way. The next step is to devise a plan. Planning your budget will be tough. You need to sit down and consider how much money you are already spending in several different categories. Print out your monthly statements and look at each line item and place them in categories. If you have a bank app that does this for you, even better.

Next, determine what percentage of your income you are currently spending in each category (for example, 30% on housing, 5% on entertainment etc). Then, calculate how much you should be spending based on your income. If you are having trouble on this step, be sure to download my free budget check up to get you going.

This will be the basis of your new budget. Stop at this point and take the time to get this in order using my free budget planner and come back. In parrt 2 of how to get your budget in check we will talk about idenitfing budget “killers”, executing your plan, and reassessing and readjusting your budget.

Keep doing (the best) you boo!

xoxo Lani

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