Last month I focused on one of the most important financial habits out there: budgeting. While I had attempted to budget before, setting aside the month to focus on it was eye opening.
Last Month’s Habit: Update
I started out the month with a very simple budget. I realized that I had failed budgeting in the past because I made it too complicated.
While zero-based budgets and percentage categories are perfect for some people, it didn’t work for me. And I consider myself the saver in the relationship!
Creating a budget like that always felt very restricting by about two weeks into the month. I’d do good the first week, but as soon as something came up that was out of the budget in one category, I’d buy it anyway if I could justify it. I’d think, “I can afford that, the money is in the bank” and I’d make it work.
As you can tell, this form of budgeting didn’t work for me. This time around, I did something very different: I kept it simple.
I wrote out a list of all of our bills for the month and totaled that at the bottom, then I wrote our expected income at the top of the page. Next I created a few very simple budget categories to the side of the page: gas, groceries, spending money, and date night.
I figured up about how much we typically spend on groceries (on our good weeks.) I did the same with gas, and figured up a monthly goal for both.
The next part I consider the most important–I set aside some spending money each week for both me and my husband. This would be pulled out in cash, and we could use it however we wanted.
This meant that I wouldn’t scrutinize every single fast food purchase that came out of the bank account. We had some freedom if we were running late one morning to grab lunch on the go and not feel guilty about it.
The fact that we had some freedom with our money helped us to feel like we weren’t so restricted by the budget. I believe this was the biggest factor in our success of sticking to the budget (for the most part!)
Finally, I subtracted our bills and budget categories from our income, and set aside a little for “miscellaneous” (you know those things that pop up you forget to plan for?)
When everything was said and done, I realized we would be able to pay off $1,500 of debt if we stuck to the budget!
As you can imagine, that was incredibly motivating–we managed to stick to the budget and pay off over $1,500 of our debt, all thanks to budgeting.
New Habit: Increasing my Income
My new financial habit for March will be increasing my income.
I’ll admit right now, I’m kind of cheating with this one! I applied for a part-time job cleaning offices in February, and I got hired. So I started this habit a little early 😉
But that doesn’t mean I want to stop there! March will be the challenge of pushing myself to find out how I can increase my income even more.
Here are some ways I plan to do increase my income:
- Take any extra hours I am offered with the office cleaning gig.
- Dig through the house to see what I can sell. Research the best way to sell each item (eBay, Facebook garage sales, etc.)
- Work on building this online business and different ways to monetize.
These are the areas I want to focus on the most. Mainly, I want to get in the habit of looking for ways to make extra money. If an opportunity arises, I want to be able to jump on it.
Out of the habits I’ve done so far, this one seems the hardest to me. Increasing income usually involves decreasing free time, and that is a sacrifice that’s definitely not easy for me to make.
The biggest thing I have to remind myself is this: I can do anything for a short period of time! Especially when financial freedom is calling my name.
What have you done to make extra money? Have you took a part-time job, donated plasma, or started selling something on the side? I’d love to hear your story in the comments below!