"I'm on a budget."
How many times have I said that and not ACTUALLY been on a budget? Countless.
I didn't even really know what a budget was. What I meant was "I know I shouldn't spend this money because I have other things I should be paying for and our money is disappearing."
Until You Need A Budget came into my life. Basically, it changed the way I looked at and spent money. The word "budget" can be scary, but the philosophy is that you can spend your money however you want, but you HAVE TO know where your money is going. Spending is all based on what is important to you.
Each month, I assign my dollars to do "jobs" for me. Important jobs like pay the mortgage, electric bill, daycare, groceries, gas, school lunch, and so on.
Next, we budget for things that will happen in the future, such as my daughter's birthday, Christmas gifts, or summer camps. Saving a little every month rather than paying it all at once and hoping we have enough money for the rest...now that was a huge, positive change for us.
Then there are the jobs for things we know are going to happen but we don't know when. These are called "True Expenses". THIS is what I was missing in my fake "budget". Things like auto repairs or medical bills. Before, those were "surprises" that caught us off guard and set us back, causing us to dip into savings. Now, we put in a little money each month to save just incase. Proactive.
Can't forget about paying down that debt! Because I know where all of my money is going, I know exactly how much EXTRA I can pay towards my debt.
Lastly, FUN MONEY! Dollars that are spent however we want, no questions asked. This is a wonderful solution for couples who question purchases. He can buy shoes and I can buy clothes, no questions asked, as long as it's within our Fun Money budget.
One thing that was a big change for me was actually assigning jobs to my savings account. I knew how much money we had in savings, but it was always "just incase" - which wasn't really motivating us to save. Well, now we are already budgeting for those (see above), so this is truly saving for fun things like carpet (me) and a boat (John)!
I have no clue how I knew what my money was doing before! I can't count how many times I have NOT purchased something because either 1) I knew I didn't have money for it or 2) If I wanted to buy it, I would have to take money out of my Carpet or Boat fund, making us that much farther away from buying either of those things.
There are so many other great things I will make a separate post about like goals, age of money, graphs showing net worth, quick budgeting, and an app for on-the-go tracking. Look for another post on tips and tricks for using the budgeting software coming soon!
(I will give one sneak peak of one of the reports because I love them so much and think you will too!)
Spending By Month
I highly recommend giving it a try if you're stuck in a money rut or if you're "budgeting" like I was a couple months ago. They offer a 34-day trial so you don't have to pay up front!
Click here to check it out!