Budgeting. Make it a Habit

Budgeting should be one of your automatic habits incorporated into your everyday life. If it is not already, now is the time to make it happen. Why? They say "money makes the world go round", and if that is true, we should be ever conscientious about where our own money is going. Make your money make your own world go round by watching where it is going...budgeting. Don't let it control you, but rather you control it!

Starting a new positive habit can be just as hard as letting go of a bad one. For those of you that are trying to start this process for the first time, or trying for the 5th or 6th time due to loss of motivation, distractions,etc; remember there are steps that can save you from failure. It's just like any promise you make yourself.  "I'm going to eat healthier" "I'm going to exercise more." "I'm going to get back in control of my money and budget better!" When trying to make lifestyle changes, there is the possibility of losing motivation down the road and even failure. Follow these tips to aid you in successful budgeting and making it a new habit!

1. Write it down - Write down why you are making this a new goal for yourself. What are the positives to you creating this new habit, and what are the negatives you are trying to avoid. Writing it down will make it more real and force you to be honest with yourself. 
2. Find an accountability partner - This could be a spouse, a friend, a therapist, or even a financial adviser. I'm not saying you have to share your most private details about your money, but if you have someone that knows you are trying to make this a new habit, they can cheer you on from the sidelines and help you to make sure your keeping at it.
3. Baby steps - Remember Rome wasn't built in a day! Trying to adopt a new habit can be overwhelming. Don't set yourself up for failure by trying too much at once. New runners don't try to step out onto the road and run a marathon on day one, and you shouldn't have to feel the need to save $5000 in a week. Set yourself smaller short term goals and when you are successful, build from that!
4. Remove temptation - Look at your history. The one you hopefully created from following my last post and decide where your weaknesses lie.  Do you take out too much cash from the ATM? Stop going to the ATM. Do you swipe your credit card too easy and then cant pay the balance off each month? Hide your credit card in a drawer at home
5. Be consistent - The more you do something, the more quickly it will become a habit.   For the first thirty days, do something to help you be aware of your budget and spending habits. You don't have to spend an hour crunching numbers, but do something daily to help make budgeting more of an automatic part of your routine.For example, set a daily reminder on your phone and check your bank account or credit card balances.
6. All relationships need a little "Q.T." (quality time)- This may sound silly, but you are in fact forming a new relationship in your life.  Just like our relationships with people, our relationships with our habits need a little quality time in order to help them grow and become stronger. Set yourself a recurring date to sit down and have some uninterpreted, one on one time with your budget. This is your time to reflect on where you have been spending and savings, recognize your failures and achievements, and see where you need to grow and improve. For me, I set aside the 1st and the 15th of each month and give myself an hour. 
   
7. Give yourself some wiggle room - Remember no one's perfect, so allow yourself to make some mistakes.   Your budget isn't ever going to be just right and it can be very difficult to start keeping up with every single penny. At the start of each quarter I look at my budget and see where I'm overspending. Instead of getting upset about where I have failed, I look at it as a chance to start over and try again, and see if I need to adjust my budget accordingly.

Good luck and get going!

Happy St Patricks Day!

Spring has Sprung! Getting more out of the new season for less.

And so it begins... Daylights Saving Time has begun and the first signs of Spring have already arrived.  All we can think about is getting back outside and enjoying the outdoors and feeling that glorious sunshine reign down on our face and shoulders. The great masses of retail and community feel it too. Many activities that we have missed all winter are sneaking their enticing claws into our minds. Community festivals are advertising their dates, amusement parks are gearing up for opening day, and restaurants seem to have customers on their patios again. Why you may ask? Duh, because they want to make money AND what better way to make money than to take advantage of the items that are everyone's priceless list!

ENJOYING THE DAWN OF SPRING AND ALL IT HAS TO OFFER

While the many natural activities of Spring are now free to enjoy, so also begins the possibilities of spending more money; money we can spend in places that we haven't been able to all winter long. As you feel yourself tempted to embark on these new adventures, stop and ask yourself, "What about these things are really enticing to me? What is making me want to partake? Is this activity a part of my budget?"  If your answer to the last question is "yes", then by all means enjoy! However, if you will pause and think about what your really seeking (probably items on your priceless list),  then you will also find these priceless moments you are seeking are found right under your nose for a lot less. I'm not suggesting these are better choices. They are simply alternatives when trying to save a buck or two.   Here are a few things I do for myself when I am trying to make the most out of my dollar and catch those priceless moments I love about Spring.

1. Enjoy your own patio-  I know I love the feeling of being able to go to a restaurant and sit out on the patio while enjoying a meal or drinks with friends or family. It's not always necessary however,  to go to a restaurant and spend the money on food and drinks to enjoy that patio feeling and time with loved ones. If you have a deck or patio or know a friend or family member that has one, recommend that you relocate to your own. It is in fact still a patio. It is the same sunshine. Not to mention the money you save serving your own meal and drinks, rather than a restaurant bill is an added bonus!

2. Exercise Outdoors - I know not everyone exercises and I will most likely post more about this "priceless" topic in another post, another day. For the purposes of this post however,  the immediate feeling I personally get from exercise is something on my priceless list and when I can do it outside, it's even better! Getting outside and getting healthy in the sunshine can be much more rewarding than the same old cramped gym. Why pay for that aerobics classes and listen to the grunting of others lift weights, when you can get the same exercise right outside while enjoying the new season.  I personally refuse to pay for a gym membership. There are just too many other ways I have discovered and learned over the years on how to exercise for mush less while earning more priceless moments.  For one, enjoying nature and the new life of Spring cannot be found in a gym. If you don't have a safe neighborhood to walk in, or backyard to perform your work-out, visit a local park, find some hiking trails, or see if a local school has their track open.

3. Do some yard work-  One of coolest parts of Spring is the beginning and return of life in most of nature. Birds come back from migration, new animals are born, and plants are blooming. What a better way to really notice this new life than to work with our hands, get up close, and aid this natural process along. Not to mention it's another form of exercise. If you don't personally have a yard, what about trying a few potted plants on a patio. If this isn't an option either, is their someone in your life that could use an extra hand in the yard. Perhaps this is your chance to spend the day with your parents or a close friend, or an elderly neighbor might want an extra hand.  


4. Visit a community festival -There are many community festivals held during the Spring and believe it or not, much of the things offered at these are free. Yes, there will be things you can spend your money on and if you have it budgeted (and only if) then spend away. However, remember to enjoy the things about the festival that are priceless as well. The fresh air and sunshine are always free of charge, sometimes you can find live music, maybe free prizes, and perhaps arts and crafts to appreciate. All this and more can be found all without spending a dime. 

5. Spring Cleaning - You might be asking, "what about this would I enjoy?" For me, indoor or outdoor spring cleaning always gives me MANY of my priceless moments. Although the cleaning part can be tough to embark on, there is in fact exercise, enjoying good music, feeling the spring weather, and knowing I have accomplished a task to motivate me along. Try a chore outside first, like cleaning the yard or gutters on the roof. Go give your car a good bath or get really crazy and volunteer to pick up around your neighborhood or nearby park. If you chose to stay indoors, open up the windows and blast some good music!

6. Roll the windows down and blast the radio -Finally, you don't have to scrape the ice of your windshield and look at your breathe for 5 minutes while the car warms up.  The sun is starting to warm up your car quite well. Most of us are in our cars everyday, so why not take advantage of rolling down the windows and enjoying fresh air. Better yet, blast the radio, your iPod, or CD of choice. Or for the daring, sing your heart out just like Tom Cruise did in that scene in Jerry Maguire!  Man, it feels awesome just to write and think about it!

 FREE FALLING!!!!

*click above for a little motivation*

7. Have an outdoor game day -This can go for any ages and any lifestyle. I love a good game. I have always been known around my bunch as the gamer.  I guess I love a little together time with my loved ones and a little good clean competitive fun as well.  College ages, singles, families with children can all enjoy. The next time you are sitting around bored, pick yourself up and step into the backyard yard or free open area like a park.You don't always have to pay those green fees for a round of golf to get in a game outside.  Try a pick-up game of basketball at the local park, invite friends over for a game of bocce ball, croquet, or horseshoes. Don't feel like being that active? Spread out a blanket and pick up a board game or deck of playing cards!

8. Relax - Sometimes being lazy and resting your body can be totally rejuvenating for the body and soul.  Get a blanket, or hammock if you already have one, and read a book, a magazine, or simply take an afternoon nap. Aahhhhhhhh.....




If you don't have the luxury of an outdoor yard area in your home or neighborhood then please remember THE LOCAL PARKS! You do already have to pay those dreaded taxes and part of it goes to maintaining those parks, so go make use of that expense! There are endless activities and opportunities here.

Drafting your budget.

In my last post regarding "Money Matters" I challenged you to sit down and look at your past three months of financial records. If you have completed this step, then WAY TO GO! You are now ready to move on to the next step, creating your budget. If you have not looked back at your history I would encourage you STOP and read my last post before going any further.

Understanding what your history is telling you
Now that you have in front of you your financial history for the past three months, let's break it all down so we can build it back up and better your future!   I made a sample sheet for you in order to help you follow along. Don't worry, this isn't MY actual numbers for my life. I'm not ready to get THAT personal :). But I do want my readers to be able to compare their work to something else. I did base the categories a little on my life. I'm single so I don't have a dual income in my house and I have no children to feed either so you wont see any line items for diapers or soccer camp. Ive tried to make this pretty basic so more readers can follow.  To make this even more basic, all of my numbers  numbers are rounded to the nearest 10 dollars. Your history, if at all possible, should be down to the penny if you can get it there.

 The first three columns are my sample totals for the past three months; Feb, Jan, and December.  In each column you should add your income and then subtract your expenses. This is how much money you have left yourself at the end of each month. As you can see from my example, each month's expenses are higher that the income. Nothing is left? The first column was over by $250 and look at the last column at $1102 over! That was December!! This is a perfect example of a history that is out of control and needs a change. If you history shows you have money left over, then way to go, but I prefer you not have money left over either. We need to get income to = expenses. How?

Because we are not robots and we don't have the exact same routine of spending and earning every day, week or month, we need to get a better idea of about how much we spend on average each month.  If we can figure this average we can budget this new amount into each line item to help us better prepare for those rare months. For instance, you can see this sample has a much higher expense in the "gifts" category in December. $0 in January and February, then $350 in December.  I personally don't spend the exact same amount of money on gifts for people each month, but when the Holidays roll around, BOOM, the expenses are out of control.  Think about other expenses you have that don't come around every month; your car tag expense, the 6 month dentist visit, buying school supplies at the start of the year, etc. I like to average my expenses across a 12 month year so I don't have to try and do the math each month for those expenses that aren't as common.  See below...

 It may seem basic, but add up the 3 months for each row and divide it by three. This average you have calculated is the amount you typically spend over the course of the year each month. Based on this average expense, you know should have a better idea of how much you actually need to prepare yourself to save on a monthly basis for the months ahead so you are prepared for those rare annual expenses. For instance, the gifts. If on average I spend $117, then I need to budget and save $117. I wont spend that every month, but when the Holidays come around, I will be ready. Keep in mind that 3 months may not be enough of a history for all categories. You may have to continue to monitor your spending over the next 3 - 6 months to get a better "average" for some categories and adjust your budget as necessary.  So you have your averages. Now what?

For those that have been over spending
Now you have to look at your past and see how to set your budget for the future so you stop this over spending. You have got to get your income to equal your expenses. That is right, EQUAL. If you are looking at a history where you are over spending,  you need to go line item by line item to see where you need to either A) make more money under income or B) cut spending in your expenses.

Here's some questions to ask yourself to get your started.

1) Am I spending too much in a category?
2) Is it possible for me to cut back?
3) If I budget myself $xx.xx, will I be prepared for the unexpected?
4) Am I missing any categories?


For those of you that always have money left over
If you have money left over then you are doing very well and already on the right track. However, when making a budget I never recommend to anticipate having money left over. Again, I said to make your income = expenses.   Since you have money left over, is there a line item where you can up your budget?  Is there a new category you should put into your budget? Here are some thoughts?

1) Do you have a category for Emergencies?
2) Do you have a category for Retirement?
2) What about savings for goals down the road that may come more than a year from now such as a child's college fund, a new car, or a house renovation?


In both circumstances list above, this is where things will start to get personal and very REAL.  I can't tell you how much money you should earn, or save, or spend on every little thing in your life in order to make your income = expense. However, I do hope that you do your best to try to budget yourself appropriately so that you can get there. So have at it, dig deep, get personal and real and honest with yourself (and anyone else involved in the household's finances) and set your numbers. Based on what you have spent in the past and what you should realistically spend in the future, find those numbers to make your INCOME=EXPENSES.

Nothing you do during this budgeting draft is permanent. You can continue to make changes as you go and I hope to continue to encourage you and offer advice as you work through this process. 

My next post on "Money Matters" will be gearing you away from all this manual addition and (zzzzzzzzzzzzzzz.....) Excel spreadsheets. I'm going to show you some user friendly websites that will begin to make this process soooooooo much easier! 

But first, well.... I already have a "Money Doesn't Matter" post all geared up and ready to go out tomorrow!


 

My Priceless List

Two days ago I wrote about making a priceless list. As I reflected on what I had written and what I should write next, I realized if I'm going to do this whole "blogging thing" I had better practice what I preach!  While I have my "priceless list" floating around in my head, I have never actually taken the time to truly think about it in a list format and write it down. If I'm asking my readers to make a list, then I should be making one too. So here is the start to my list. It will grow and change everyday. I will come back here often and update it as I discover more about myself. I accept I must be flexible with this list and keep plugging along with it to better my life. It is MY list. I am open to sharing it, but it is created for ME. Please create your list for YOU. Yours may be similar or totally different, but again, I'm asking you to make one. 

• Laughing so hard it makes me cry
• Getting or giving a hug just....because
• Getting lost in a really good book
• Family time
• Friend time
• My relationship with God
• God's mercy and love for me
• The first signs of spring
• Snowflakes falling on my face
• The feeling after a good workout
•  Being shown appreciation when you least expect it
• Showing appreciation and gratitude
• Seeing someone light up in a genuine way when they open a gift you give them
• Random acts of kindness
• Sharing a smile with a stranger
• Soaking in nature's beauty
• Recognizing nature's beauty 
• Realizing the positive side to things, even when it appears so negative
• Coming out on the other side of a really painful time and being able to say "I made it"
• Fresh air on my face
• Hearing music that moves me (in a soulful way)
• Hearing music that moves me (in a way that makes me want to dance)
• Falling in love
• Being in love
• The moment when a child teaches ME something
• Whether I'm gone 2 minutes or 2 days, the way my cat ALWAYS greets me at the door 
• Whenever I feel needed

To be continued......




As I started to think about my list and what my priceless items were, I contemplated what all the items in my list had in common. I realized the roots of most of my list were from emotions I felt during my life experiences and the comfort they give me. Some of these priceless items can be found for free and some of them you can find with a little help from money. However, if you are spending money to seek out these priceless moments, I encourage you to proceed with caution. I'm reminded of a Beatles song.  "Can't By me Love" .  Love is an emotion we can all agree feels wonderful and priceless. But just as the song says,  "Money can't be me love" . Be careful not to get so lost in seeking out your priceless moments that you start to spend too much money in your search. Priceless moments should be genuine, natural, and come from the heart. If you try to buy them with money, then you are defeating their soul purpose. Don't try to put a price tag on them.  They are after all, PRICELESS.
 
This was my priceless moment of the day.
 - Realizing the positive side to things, even when it appears so negative -

 Thank you dreary rainy day for bringing us beautiful flowers!

Budgeting. Learning from our past, before we move forward.

In my last budgeting post, http://livemoreonless.blogspot.com/2012/03/living-on-budget.html, I talked about why it's important. I gave my personal testimony of how it has affected my life and gave a very brief intro on how to get started for yourself. Feel free to go back and read it if you have not. This newer post will guide you in more detail on how to get your budget going.


Budget? But where do I begin?
Have no fear. It really isn't that hard. The hardest part is to take this first step. I want to disclose up front that I have no PHD in finance. I'm not claiming to be a know-it-all. I just want to share some fundamentals that have helped me through the years. Perhaps if this is too elementary for you, it may be a nice reminder for what you already know or perhaps give you new ideas. If this post seems too simple, I hope that you will be patient in knowing I have even more to share in the future. Oh, I'm going to open up and dissect your budgets and hopefully enhance them with some of my personal saving secrets. But first, for our new comers or those that already know how to budget that might need a fresh start, it's time to take a look into our past.....

Step 1  - Gather your past records. 

The first thing I encourage everyone to do in order to budget for your future is take a look at your past. Start by pulling your records for at least the last three months. Gather everything you can including bank account statements, credit card statements, and any cash payments for which you can remember that you may not have kept an actual paper receipt (baby sitters fees, lunch at McDonalds last week, etc.)

Step 2 - It's time to get real
Once you have these items in front of you its time to take a look at where your money has been going. This may take some time. Be thorough and don't cheat. Prepare yourself for what you are about to find and be as honest as you can. I'm serious. Be really honest no matter how surprised or embarrassed you are at what you have been spending and where.  The only way to get back in control is to be be honest about where you may have lost control, then accept it, and now make the necessary changes to move forward. Remember, no one is perfect and we all have our weaknesses.  Recognize your flaws as a part of who you are and work on them daily to continue to grow into the better and unique individual you are.

Step 3 - Income and Expenses
Your records will show you where you money is coming in and where you money is going out. Your ultimate goal is make sure your outbound money is ALWAYS less than the inbound. Sounds pretty elementary right? Take a quick glance at yours.   Are you spending more than you are saving? If you are saving more than you are spending, can you save more? Lets take a closer look at exactly where you are earning and spending.

Step 4 - Building categories for your income and expenses.
 Keep in mind everyone's lifestyles are different. A 17 year old will not have the same income or expenses as a 45 year old married individual with three children. That being said, mine may be different than yours. I will do my best to include as many examples as possible, but only you know the details of where your money is going now or may go in the future.  Use my sample picture below as a guide to get you started on categories for yourself.  Take all, and I mean ALL, of your income and expenses you see in the records you have gathered in front of you and assign each one to a category. Keep a running total as you go for each category.

Now add up your total income. Add up your total expenses. Which one is greater?

Congratulations -  No matter how proud or ashamed you are at how much money you are spending or saving in each category, you have taken the first step toward regaining control of your money.
What you have in front of you is your reality for the past several months. Now it's time to look forward to the future months and decide where you want to be in each of these categories.

We have looked back. Next, we will be looking forward.

"A penny saved is a penny earned." - Benjamin Franklin

Money Doesn't Always Matter - Make a Priceless List

So if you have read the back story to my blog you know by now the content of this blog is two-fold.

1 -Money Matters

In life their are things that money can buy. Money enables us to obtain our needs and some of our wants. Day in and day out, we make money and spend money and then make money again. It's a cycle. Earn and spend. Earn and spend. I plan to guide and inspire you to take part in this cycle as wisely as possible. Don't get lost in it. Be in control of it.

Yesterday, I got a jump start on the money topic and Step 1 was to make a budget.  Today I would like to talk about the other topic...

2- Money Doesn't Always Matter

While I hope to give everyone financial advice, I also want to encourage everyone to take the time to discover the things in their life that money simply cannot buy. I wasn't sure what to call these things, so for now I will call it a "Priceless List". No matter how hard we work, and how much money we make, and how much advice we receive, the "Priceless List" is the part of our lives that money cannot buy.  When the financial side to your life feels like it's out of control, when you are prospering yet you still do not feel satisfied, when you feel like you have no hope during hard times, these are the times to turn to your "Priceless List".  I will be sharing what is in my list and in turn I hope that you will find yours. Please note, I have no intention for you to agree with all of my priceless items and moments. I don't intend to pressure you into loving what I love. These things will be different for everyone and I cannot define them for you.  I want to share what makes up my "priceless list" as way to help you find yours. You can try what works for me or you can try something totally different. I just encourage you to try.  While society may force us in to needing money for some things, you just may find a little freedom in knowing that it cannot provide you with everything.  I challenge you to dig deep and define for yourself things you cannot put a price tag on. This list will be ever changing so be flexible. Yesterday I asked you to make a budget. Today, I ask you to make your "Priceless List".