Me again, here to ensure you that creating a budget doesn’t have to feel like pulling teeth! So far, we’ve discussed Lies People Believe About Budgets, and Reasons Why You Need a Budget. As we continue our journey to understanding budgets, I want for us to look at qualities of a good budget. If we’re going to put in the effort and work, we ought to do it well! Let’s look at 4 qualities of a good budget:
#1. A good budget is easy to maintain.
A budget that is difficult to keep up with isn’t helpful. Ain’t nobody got time for that! We want a budget that keeps track of our money, but doesn’t take a million hours to maintain. I personally use a google spreadsheet to track our spending, but some people feel that is too much work. If that’s you, then there are apps that can help! Every Dollar is a great one – you set your budget on your phone, and then just enter the information every time you spend. This is super helpful for when you are out and about – you can just pull out your phone and see where you’re at on spending. Another helpful app is Mint – if you link this one to your bank account, it will actually help track your budget and spending for you. Again, it’s on your phone so you can access it at any time
#2. A good budget accounts for every dollar.
When setting up your budget, it should account for every single dollar brought in. The reason for this is that when we don’t find a place or purpose for each dollar, we are more likely to spend it without thought. If you make $4,000 a month and only need $3,678 for your expenses, you can put that extra $322 into savings, put it towards a vacation, whatever you want. You just don’t want to have money floating around with no purpose.
#3. A good budget accounts for savings.
You guys, this is imperative. No matter what you bring home, it is so important to save. This helps protect you and your bank account in case of an emergency. My personal rule of thumb is to aim to save at least 10% of our monthly income. This seems like a lot, but it has really helped us out in a pinch (like when my car randomly needed a new transmission). If you can’t save 10%, figure out what you can save and stick to that.
#4. A good budget starts with the big things and works down.
If you have a bunch of big rocks, some small rocks, and some sand, how do you make it all fit in one jar? If you start with the sand and then work up to the bigger items, it won’t work. You have to start with the biggest rocks first. Your budget is the same way. Start with the biggest, non-negotiable items and work your way to the smaller things. This will ensure you have enough to cover the most important things.
Creating a budget doesn’t have to be hard. All it takes is a little time and dedication. You can do it. I believe in you! If you have any questions, feel free to reach out.