Happy Wednesday everyone, and happy Halloween! If you have little ghosts and goblins you’re taking out to trick-or-treat, I hope you have good weather for it, and that your little ones get lots of candy. Maybe they’ll even share with you.😊
A little while back, we talked about Financial Wellness, and I shared some websites and apps that might be helpful for budgeting and getting or staying on the path to financial wellness. Since this typically starts the time of year where we have many opportunities to donate to various charities, spend extra on food, and buy gifts, I thought it might be a good time to talk a little more about budgeting, or more specifically, a spending plan.
I’ve heard Dave Ramsey, author of Financial Peace and founder of Financial Peace University, say something along the lines of… you have to tell your money where to go or you’ll look and it’ll be gone. I know I’ve found that to be true. How about you?
Dave Ramsey, Crown Financial, and many other financial websites and apps have great budget worksheets you can print out and use, or software you can plug your info into. The only problem for me is that (if I’m being completely honest) I’m too lazy to do all the work some of these things require. Also, I do like to have a paper copy of my spending plan. For some reason, that makes it more real.
Because I know that about myself, years ago I made a simplified version of our spending plan and have been using it ever since. I’m nowhere near a financial whiz – if I was, I’d be completely debt-free and living on an island somewhere – but as I talked about with exercising, the best exercise (or in this case, spending plan) is the one you’ll actually do (use).
These two little sheets have helped us get and stay on our path toward financial wellness, so I thought I’d share them with you. Obviously, your sheets wouldn’t look exactly like mine, but the basic idea is just to ‘tell your money where to go.’
- For income, planned and actual should be the same, but occasionally, you might have some type of additional income you hadn’t planned on, such as an unexpected refund, some type of rebate you receive, etc.
- Separating expenses by category helps ensure all your absolute necessities are taken care of before you start spending any discretionary funds. As you can see, I’ve color-coded categories just to make it easier to see what’s what at a glance. You can use the extra rows to break the overall categories into specifics also.
- You know that old adage about paying yourself first – if you can put even a few dollars into savings each month you’ll have some ‘padding’ if emergencies come up and if not, you’ll accrue a nice little nest egg over time.
- Grouping day-to-day living expenses helps you make sure all those things are covered and ensures you don’t forget anything.
- The red for these expenses indicates the types of expenses that are considered actual debt. You’ll notice the mortgage is grouped with the day-to-day expenses because we have to have a place to live, but it’s also a debt so I colored it red.
- Last, but not least, if there’s money left over after you budget your expenses, I would suggest moving most of it into savings, but I always keep a little bit in my miscellaneous category in case some small expense I haven’t budgeted for comes up.
I know this is really simple and a lot of you are light-years ahead of using this type of spending plan, but for anyone who struggles with budgeting, maybe something like this can help.
The other sheet I use is basically like a big check register. For our day-to-day expenses that are spent throughout the month, we tape this sheet to our calendar, and whenever we spend money from one of the categories, we put it on the sheet, subtract what we spent, and annotate the new balance. That way, we always know what we have left in any given category.
If your financial dimension of wellness isn’t where you’d like it to be, I’d encourage you to take a look at the resources I mentioned, as well as some of the ones mentioned by others in the comments, in the first post about financial wellness.
When my son was small, he and his little friends were fond of saying, “You’re not the boss of me!” Well, guess what – we ARE the boss of our money; we get to choose how to spend it. Deciding where it needs to go ahead of time helps us make sure IT knows we’re the boss.
Do you have any tips or tricks you’d like to share to help us stay on track toward financial wellness? Please tell us in the comments below!