I’m living the budgeting dream
I think I’m addicted to budgeting. You will have to pry my spreadsheets out of my cold, carpal tunnel syndrome-riddled hands before I stop.
The addiction started about 4 years ago, innocently enough. As a college student I wanted to keep track of the limited funds deposited into my bank account each month, courtesy of my parents and the odd jobs I worked.
From there, I started spiraling. One thing led to another and I began experimenting with different formats, which led to color-coding my expenses, and, finally, worst of all – using formulas to improve my workflow. I hardly recognized myself.
The pleasure I get from simply logging my purchases, debt payments, and savings into a bunch of cells on a screen is better than any drug available in hospitals or your high-school dropout cousin’s basement.
Addiction aside, budgeting has become an essential element of how I live my life. I have gained so much control over my finances since buckling down and getting serious about tracking my money on a monthly basis. (If I’m being honest, more like a daily basis.) You can check out the template I use here.
So here’s how I do it:
First, I start with what I net every month. I get paid twice monthly in equal amounts, so I always know what’s coming in.
Using that amount, I’m able to build the rest of my budget to ensure I don’t spend more than I make.
Budgeting Fixed vs. Recurring Expenses
I have two categories that my expenses fall under: recurring/fixed and variable. The recurring/fixed expenses are ones I know are the same month to month, like my car insurance and debt payments. The variable expenses switch up every month, such as groceries or gas, for instance.
With fixed expenses, I know exactly how much money is going out. When it comes to the variable expenses, I set limits for myself so I don’t overspend. Which is quite literally the entire point of having a budget.
“Random” expenses fall in the variable category. This is for one-time expenses that don’t pop up every single month, such as the unfortunate case of getting a red-light ticket or buying a birthday gift for my mom.
Tracking Progress
I also track my savings. I have a goal to save $500 each month, so with every paycheck I put $250 in my savings account.
Then at the end of the month, I add up the total amount of money I spent and subtract it from my income and get the total amount left over (hopefully not in the red!). The goal is to get that number as close to zero as possible without going negative.
I also keep track of my loan balance month to month. It’s a great way to see the progress I make as I watch the amount I owe shrink with every payment.
Have Patience with Your Budget
It has taken years of trial and error to build the current budget I have today. Life isn’t constant and I’ve had to readjust as my income has fluctuated and I’ve taken on new expenses. For me, the experimenting is part of the excitement of creating a budget!
Budgeting may not be as thrilling and addicting for everyone as it is for me, but it is truly a necessary practice for anyone who wishes to gain control of their finances and, in turn, their life. If you wanna learn more about how to start a budget, check out The Beginner’s Guide to Budgeting.
Control your money. Don’t let it control you!