Welcome back to our series on adding new financial habits to your life! To read the first post with January’s financial habit, click here.
Last month, I chose to focus on writing down my spending. For the first new habit of the year, it seemed good to start with what I’m already spending money on.
Last Month’s Habit: Update
I’ll admit, this habit was not easy to create. I started off by printing out my expense tracking sheet from the Debt Destruction Guide. I wrote down the first expense with my favorite gel pen and was good to go.
The next few days I was out of the house and would spend some money, but the tracking sheet was at home. So I played catch-up by looking at my bank account and writing down the expenses when I thought about it.
A few days went by and I didn’t write down my expenses, so I had a lot of catching up to do. It was then I could tell that this was not working.
Instead of giving up, I went to Walmart and bought a 49 cent tiny notebook (and a fancy new pen because I love office supplies and sometimes I have no self-control.)
I started to carry the notebook and pen in my purse, and anytime I spent money throughout the day, I would write it down in that notebook.
Once one of the sheets was full, I would total the amount on the bottom line of the page. It was eye opening to see how all these little purchases added up to over $300 a page! It made me more mindful of every $6 or $7 bucks I spent here and there on food, random purchases, etc.
By carrying this notebook in my purse, I was finally able to make tracking my spending stick. By writing down purchases when I made them, instead of playing catch-up throughout the days, I was able to see the impact each purchase I was making had on my overall spending.
This is definitely a habit I will continue! I can’t wait to see what my notebook looks like at the end of the year.
New Habit: Sticking to a Budget
This month, my new financial habit will be sticking to a budget.
Budgeting is something I’ve tried to do time and time again. Yet, over and over again I find myself forgetting about the budget halfway through the month.
In order to make this habit stick this time, I’ve done a few things to prepare.
The most important element to success was getting on the same page with my husband. We started talking about our goals and dreams for the future, which naturally led into a conversation of how we’re going to get there.
My husband and I both want to be debt free, really bad. So I grabbed a paper and pen and asked how we could make that happen. I added up all the expected income we’ll receive for the month, and all of the bills that should be coming out. I even took the time to think of all the miscellaneous expenses such as doctor appointment co-pays, car registration fees, etc.
Next, we decided on how much we wanted to spend on groceries and gas. To do this, we looked back to what we’ve been spending the last few months in these areas. We came up with an average figure and made our goal to be $60 a week, both for groceries and fuel.
Finally, we decided on how much “fun” money we wanted to spend for the month. We ended up giving each other pocket money of $20 a week (in cash) and an extra $20 on the weekends to watch a movie or have some other cheap date night.
You may be thinking, “Why would they spend so much to have fun if they want out of debt so bad?” I questioned it too!
But one of the reasons I believe we’ve never stuck to a budget is because we’ve set ourselves up for failure by being too strict.
You have to set yourself up for success, and sometimes that includes budgeting in a little wiggle room.
The truth is, I don’t see myself spending my whole $20 of fun money every week. I’m trying to decide now what I want to do with the extra money that’s leftover at the end of the month. I’m thinking an extra debt payment?? It’s important to decide where any extra or leftover money will go before you have it or else you will end up spending it and not even know where it went!
Once we got the whole budget lined out, we subtracted our expenses from our income on paper, and we should be able to pay $1,500 to debt this month!
We are relying on overtime for quite a bit of that, so if my husband doesn’t stay on the same overtime schedule then things will look quite different. That is where my new part time job I’m hoping to get will kick in. But for now, we are pretty confident that his overtime will stay.
Now that the budget is set, this is where the hard part kicks in! We’ve got our budget lined out, and it looks pretty doable. Now we just have to make sure we stick to it.
So far we’ve set ourselves up for success by withdrawing our pocket money for the week. This way I know that if me or him decides to go out for lunch one day, that expense won’t randomly pop up in our checking account.
I also went grocery shopping, and I was upset that I went over budget by about $10. So I started thinking of where I should take that money from. Thankfully, I was reimbursed for some mileage at work which came to just about $10.
It seems we have someone on our side after all 😉
The new month is just beginning, but I feel confident we will stick to our budget now that we know how much debt we could pay off is at stake.
Here’s a rundown of some quick tips for sticking to your budget:
Get on the same page as your partner (or accountability person). Make sure they agree on the numbers.
Give yourself some spending money, I would recommend using cash for this (even if you use your debit card for everything else.)
Continue to track your spending so you can analyze what those leaks in your budget are and patch them.
If you go over-budget, find somewhere else to take the money from or find a way to earn the money somehow. Don’t blow your whole budget over one mishap!
I’m really excited to start following a budget this month! Every time I check the numbers, I feel like I must have added something wrong. How on earth have we had all this extra money in the past months, and have never been able to make a dent in our debt? That changes now!
If you are following along this journey with me, I’d love to hear how your new financial habits are going. Leave a comment below and keep me updated!