The Austerity Diaries: Creating a Budgetand Sticking to ItDaisy Luther Sticking to the budgetthats the tough part. This is where most people experience financial failure. They know what they should be doing, but that little treat is just calling out to them, and they think, One off-plan expense wont matter. Or perhaps they have a spouse who is not really on board with the whole budget business and they are constantly playing catch-up because of unplanned expenses. The economy is certainly not getting any better, so its important to get control of your finances NOW. With careful planning, you can keep everyone happy, have the occasional treat, and still stick to your budget. Budgeting is like dieting. Really, if you think about it, a budget is a lot like a diet. Everyone hates doing it, but sometimes our pants wont zip and weve got to do something about it. So, you figure out what your caloric intake should be. Every bite of food you eat should be measured and accounted for and you subtract the amounts from your allotted intake. Sometimes you have an off-plan meal a piece of cake at a birthday party, a celebratory dinner out, or an ice cream cone with the kiddos. You have to account for this too, and you cant do it too often, or your diet will fail. Its exactly the same with money. It is often the influence of others, no matter how well-meaning, that causes you to go over you financial calorie limit. If you plan carefully, you can allow yourself some wiggle room to enjoy something outside of your normal diet (or budget). For example, when dieting, if you know that you have a party to attend, you might eat fewer calories for a day or so leading up to the event so that you can splurge without guilt. When budgeting, if you know there is an outing planned, you might cut back a bit on the grocery bill that week in order to have extra money to spend during your event. When dieting, if you want a treat, you can have it but you might be eating steamed veggies for the rest of the day if that treat is the equivalent of your daily caloric intake. Likewise with spending, if you want a Disney vacation, you can have it, but you might need to live in your uncles car, since you wont also be able to afford to pay for that, your mortgage, and your car payment. Eating whatever you want can have unpleasant consequences. So can spending whatever you want. Heres how to create a budget. Most folks have created a budget before, so feel free to skip over this part. Creating a budget is simple. In one column, you have your money in, and in another column you have your money out. Money in might be: Money out might be: So your first step is figuring out those two totals. In most cases, your money in will be more than your money out. If it isnt, you have a serious problem and you need to look at lowering your fixed expenses ASAP, or your financial problems will spiral so far out of control youll end up destitute. Assuming you have some money leftover, this is for your variable expenses. You may want to allot this money to savings, to preps, to paying off debt, or to spending money for the members of your family. Are you surprised when you see the numbers there in black and white? Maybe you bring in more than you thought. Maybe you are spending more than you realized. Either way, now that you can look at it all on paper, the next part will be a lot easier. If you are going to keep spending money using credit cards, then you might as well skip the rest of this article. Youll be paying exorbitant interest if you dont pay them off in full each month and, whats more, its impossible to control spending when people can just swipe a card. This is especially true if other family members who are not as budget conscious have access to the cards. Lock them up in your safe and use them only when it is necessary. Then immediately pay of the balance in full. Sticking to the budget So, planning the budget is easy. Anyone who can do basic math can create a budget. But how do you stick to it and get your finances under control? Controlthats the key word. This is the method that I use. Feel free to adapt it to your situation. I have a bank account that I use specifically for fixed expenses. All of my payments out go through that account. Everything that is not earmarked for bills comes out of the account. I dont carry a debit card with me for this account, to reduce the temptation of knowing I have that money theremaybe I could just buy this and replace the money real quick before the bills come out. The money that comes out is immediately organized intoAltoid tins. (Finally another use for those little tins!) The tins go into the safe until they are needed. Its like the envelope method, but in a different container. If there is money leftover after Ive sorted my variable expenses into the Altoid tins, this goes into my wallet and is my spending money. I keep grocery money in (you guessed it) an Altoid tin in my purse. When spending grocery money, the change and the receipt go into my tin. That way, I know Im sticking to my budget for food. When the tin is empty, it means Im out of grocery money. Sometimes I have extra money left at the end of the week, and that stays in the grocery money tin to allow me to make some large bulk purchases. (Learn more about stocking your pantry on a budget HERE and HERE) Some of the variable expenses that I delegate money to are: Its important to prioritize these areas. Just because the tin exists, doesnt mean that you have to put money into it each month. Ive listed these in the order of importance in our family. Just because there is money in the tin doesnt mean it gets spent each month. The beauty of this is that you less frequently have a big expense that you havent planned for. If my daughter needs new glasses, the money is there, available for the appointment. If we want to go visit a museum or national park, we have some money set aside to do that. Alternatively, if the tin is empty, the expense has to wait. Maybe the birthday celebration will be a bit more humble, the greenhouse will have to wait to be purchased for a few more months, or well have to make do with clothing that is a little snug for a couple more weeks. Our entertainment will be limited to Netflix, a nature walk, or a trip to the library. Like I said, the key to this is control. One person has to be in control of the finances. Im not recommending that anybody become a tyrant, doling out nickels after a family member begs and pleads. However, if anyone can just go and help themselves to the money that has been budgeted, this is not going to work. Unless both partners are completely on the same page, the person with the best financial sense needs to hold the key to the safe. I know that if youve just been shaking your head, paying off the credit card bill, and belly-aching a little each month, that your family isnt going to like this. Youll probably have to listen to some adamant complaints. It will be worth it in the end when you have the peace of mind that comes with having your budget under control. A budget is not about a total spending freeze. Most people hear the word budget and automatically cringe, picturing a state of horrible deprivation, old clothes, and perhaps their big toes poking through that hole in their sneakers. Much like the word diet (see above) budget is thought of in negative terms. Im not going to liesometimes its like that, especially if things are really out of control. But usually, at least after the first couple of months, it isnt bad at all. Being on a budget doesnt mean that you cant spend money. It means that you plan for your expenditures so that you can afford the stuff of everyday life. It means that you pay for the necessities first and that you get the extras second. It means that you scrutinize where your money is going and you make certain that your purchases are worthwhile do you really want that fancy meal out each week, or would you rather put that money towards a fun family outing at the end of the month? It means that those expenses that you know will come up (like new eyeglasses) will be planned for, and they wont make an enormous dent when its time to pay for them, leaving you rolling pennies for gasoline to get to work. If you havent really been able to stick to a budget in the past, what has been the fly in the ointment? A partner who was not on board? Difficulty planning? Lack of control? If youre good at budgeting, what are some tips you can offer to those who find it challenging? Daisy Luther is a freelance writer and editor. Her website, The Organic Prepper, offers information on healthy prepping, including premium nutritional choices, general wellness and non-tech solutions. You can follow Daisy on Facebook and Twitter, and you can email her at daisy@theorganicprepper.ca If you enjoyed this article, please Vote for The Organic Prepper as a top prepping web site. 