Budgeting: a word that strikes fear in the hearts of Americans. It’s too time-consuming. It’s too complicated. I won’t be able to stick to my budgets anyway. I can just operate with general principles. All code for: I don’t want to feel guilty for overspending or constrained by rules.
Creating and sticking to budgets can be complicated and time-consuming and difficult, but it doesn’t have to be painful.
Budgeting money seems a lot less daunting when you stop thinking of it as something that constrains and start thinking of it as something that enables. Budgeting doesn’t constrain your fun; it enables you to max out your favorite kind of fun. It helps you to be a wise steward of your money by:
- Setting aside money you want to give away from the beginning of the month (instead of giving whatever is leftover).
- Establishing healthy parameters so you don’t overspend on big decisions (a car or a home) or small, everyday decisions (impulse Target purchases or Starbucks pick-me-ups).
Budgeting enables you to take care of your household needs, plan for generosity, and decide in advance where and how you want to spend your abundance.
Before I started budgeting, I would mindlessly spend my giving money and my abundance money without even noticing it. A new shirt here, some extra snacks from the grocery there, a glass of wine at yet another dinner out because “I deserve it.” I always wondered why I was coming up short when I knew I had enough to make my ends meet.
When we got married, Dan and I spent many hours determining our budgets and quite a bit of time each month keeping track, adjusting course, and just getting used to the whole process. I’ll admit that in the beginning, the budgets did feel constraining.
But learning to budget is a lot like going on a healthy diet for the first time. It’s difficult in the beginning; you feel empty; your deep-seated habits constantly scream to have their way. So you muscle through by reminding yourself that you’ll see the benefits eventually and that what you’re doing is good for you. Your muscle memory gradually starts to change, and you develop new habits. When you cave and eat the pizza, or blow your budget at Hobby Lobby, it leaves you feeling a bit sick. Little by little, you develop a love for the things that keep you and your bank account healthy.
I share this next part with you not at all to toot my own horn. My heart behind sharing this information is to be transparent and to show you what is possible with careful budgeting. As 2014 came to a close, Dan and I pored over our bank statements and budgeting tools. In just one calendar year:
- We gave more than we ever have (and more than the goal we set) to our local church, missionaries, and other charitable organizations we support.
- We have zero credit card debt. We started the year this way and kept it this way!
- We built an emergency fund that can cover 3 months of expenses, and our current goal is to get to 6 months.
- We paid off the remaining balance on Dan’s car. (And two weeks ago, though not at the end of 2014, we paid off mine.)
- We made our normal student loan payments, plus some extra payments when we could.
- We spent all of our $2400 vacation budget, and we got four amazing trips out of it.
- We overspent our grocery budget by about $50 each month (so frustrating!), but it was a tough year for meat and produce prices, which is basically all we buy.
- We saved $20,000 (not including the emergency fund). We put $8,000 of this into our retirement account, and the rest we put in savings to be used for a down payment on a house (which, as you know, we bought just a few weeks ago).
It’s also worth noting that during 2014—from June through September—I was sort of unemployed. I was working part time at an unpaid internship with Today’s Christian Woman and part time as a server at a local restaurant. Even in my current full-time job, I make about 30 percent less than I did at my previous job.
I am consistently overwhelmed by the provision God has shown us and the abundance He has entrusted to us. It’s so much more than our daily bread. I never want to take it lightly.
I am just as astounded that, had we not set and stuck to our budgets, we easily could have spent that $20,000 without even realizing it.
The progress was slow and hard to see along the way. Some days it felt like we weren’t saving a dime. But taking stock at the end of the year was like that moment when you step on a scale after you’ve been eating healthy and working out for several months. You know you look and feel better. But when you see the number, the quantifiable measure of all your progress, it feels like a monumental triumph. You think, I’m never going back to how I was before. This is life. This is good. This is healthy.
Are you ready to give budgeting a try for yourself? Here are a few of my favorite resources to help you get started. (By the way, none of these are affiliate links or sponsors of this post—just resources that I really believe in.)
- Mint – Our budgets would die a very quick death if we didn’t use this. You basically connect all your accounts to this one online tool (checking and savings accounts, credit cards, car loans, student loans, retirement accounts, investments, etc.), and it updates everything for you. You can create and adjust budgets, set goals, and track your progress. The best part is that it pulls in all your debit and credit transactions and categorizes them for you! It doesn’t always get it right, so you can override these mistakes, but I’d say it’s about 80% accurate.
- Global Rich List — Think you don’t make much money? Think you’re at the middle of the pack? Get a little perspective on your wealth. It will motivate you to use your money more wisely and generously.
- Financial Peace University — If you’ve never created budgets before, or if you’re trying to get out of a massive amount of debt, consider taking this 9-week course. It does a great job of addressing the basics of finances and budgeting, but it also addresses the root of our overspending tendencies and the mindsets behind making wise financial choices.
- 20something Finance — An excellent personal finance blog by a guy who lived it the hard way and dug himself out of a serious financial hole. His tips are practical and easy to apply, and it’s not just for kiddos in their 20s! People of all ages can benefit from his guidance.
For Dan and me, budgeting is a tool that helps us live simply: dreaming within our means, spending money on the things we care about most, being responsible with what we’ve been given, and rejecting the extras that would just weigh us down and clutter our lives.
I am in no way an expert on budgeting or personal finance, and these resources barely scratch the surface of the great stuff that’s out there to help people manage their money well.