Monday, January 4, 2010

The "B" Word

I've spent my fair share of time perusing mom-blogs, lifestyle blogs, home-management blogs and the like. One of many things I've observed is that there aren't very many of us talking about budgeting. It gives me pause as it's such a bread-n-butter part of everyday life.

So. It may not be chic or trendy, but this week at Bloom...we're going there.

It's January - the season of goal-setting and improvement-seeking. I'm willing to bet that the subject of money management cropped up in your resolution-meditation at least once. 'Tis the season to regain control, to make changes.

I love budgeting (scout's honor!) We budget every dollar that comes into our hands -- every month. And (for the most part) we live by it. We need it. So do you.

Here's why:

5 Reasons Why You Need a Budget

1. Control. It's not fun to get to the end of your money before the end of the month. You need a plan from the outset. Budgeting is deciding in advance how/where you will spend your money (giving each dollar a job) instead of wondering after the fact where it all went.

2. Marital Harmony. If you are married or otherwise involved, you don't want money-related contention in your relationship. The budget is an objective way to eliminate it. In a quick-ish "pow-wow" at the beginning of the month, you can come together with your spouse and communicate your financial needs (ie "I need $50 of fun money to entertain the kids...) and plan your expenditures accordingly. With a clear picture of available funds, each person can understand why certain restraints need to be in place during a tight month or give input on how disposable funds should be spent when there is surplus.

3. Goals. You have goals - the budget will help you align your spending with your values. Raise your hand if you recently watched Julie & Julia and are now desperately wanting a trip to France. Okay, maybe it's not that. But there's something - new furniture, a day at the spa, a hot pair of boots...) and you tell yourself you're going to save for it (the trip, the spa, the boots), but then you see a cute scarf at Target (dunn-dunn-dunnn!) And in an enamored-consumer moment -- you forget about your longer term, more fulfilling savings goal and sacrifice it on the altar of instant gratification. A budget brings you back to your goals - frequently. It allows you to set aside the money for them. It aligns your spending with your ultimate goals.

4. Peace of mind. Do I need to say more on this? Not much.
Just this: It's comforting to know that you've got a sum tucked away for your next insurance premium, your health insurance deductible, unexpected car trouble, a rainy day. A budget will allow you to plan for/accumulate funds for these types of things. Imagine this: your little boy breaks his arm and the associated medical expenses total $479. You don't even think about your credit card. You've got $500 in your "medical deductible" pile. Sounds like peace to me. You want that.

5. Love. You're going to love it. Really. More on this tomorrow, but budgeting isn't a kill-joy. It's like any other thing that gives you more control (ie freedom) in your life -- conscious eating, regular exercise, disciplined time-management -- it's rewarding and invigorating.

Still to come...
Tuesday: Budget Myth Busters
Wednesday: My budget of choice (and a surprise for you - dont' miss it!)

Questions/thoughts about this?

Leave a comment - I'll pop in
on the thread periodically and we'll chat.



Jenny said...

I completely agree on the importance of a budget! Thank you for posting about it.

Rachel said...

Great topic! Looking forward to the discussion.

Abbie said...

(Accountant trained husbands would be so proud right now:)

Amen! We're actually not great at recording what we spend to the dime, but we are super frugal and get a general idea every month where our money is going.

We were actually talking about it last night because I really couldn't believe Mr. Fugal Pants White got me a certain present because he never spends that much on gifts. And then he said he got because we've done a good job. If you do a good job and control your money (like you said), you can get awesome things/trips/whatever that really matter to you instead of those instant gratification things that aren't that good.

And (you knew my comment was going to be lengthy)we always like to be frugal on THINGS and really invest on experience that will really help us grow or open our eyes as human beings. I like that. I might have cheapo clothes, but that's okay with me if I get to go on trips!

Okay, I'll be done.

Sally said...

We swear by the cash envelopes budget at our house. Sometimes people give me funny looks at the store when I pull out all my labeled envelopes, but I don't care. It's so much easier to pass up that cute scarf when I'm looking at all the money I have for the month and know I'll need last minute diapers.

Mandi said...

Thanks for the post! I think I needed to hear this. The hubs and I used to be the most frugal people on thee planet. . . until we moved into our house. Now we have to have "everything" to make our house complete. Stop the insanity! It doesn't have to have everything. We need to chill.

The Oxford Family said...

My husband and I have never had a budget. We did pay off all of our debt last year but we also wasted a TON of money. I am hoping to quit my job very soon and we will definitely have to change our spending habits. Can't wait to see what's in store this week! Thanks for posting something needed...even if it isn't so much fun :)

Emily Anne said...
This comment has been removed by the author.
Bloom said...

Abbie: love what you say about spending less on "things" to have more for memory-making and really meaningful experiences.

Sally: we did cash for a while in college - it definitely keeps you honest and gives you an idea of where you're at at all times.

Oxford Family: congratulations on getting out of debt! that's fantastic! You'll definitely need a careful budget to make the change from two incomes to one. But you can do it!

Thanks for your comments everyone!

LJ said...

I really needed to hear this. I'm good at lots of things, but budgeting is not one of them! I'm determined to make a better go of it this year, so all tips/tricks and advice will be much appreciated!

Stacy said...

I sat down just last night and drew up a budget for this month. It feels really good to know where our money will be going, and very true that I will be more likely not to buy that scarf!

Jessica said...

I totally agree! My husband and I are working on saving money this year. But we have yet to find the best way to budget our money. I'm hoping to find some great new ideas.
Thanks so much for the reminder and helpful hints.

Diana said...

I'm excited to read as this topic unfolds.

We're fairly frugal, but both my husband and I were self employed over the last 10 years, so budgeting was like trying to hit a moving target. We did well anyway, and managed overall to stay ahead and avoid debt.

Recently my husband took a full time job with a company and receives a regular salary, so setting a stronger budget has definitely been on my mind, but I admit to have fairly week skills. so thank you, and I'll stay tuned!

Jesslyn said...

You're so right! Why do people avoid this topic like the plaque? Budgeting isn't hard to plan, just sometimes hard to follow. But if you set a budget and test it out for just a few months you will be so assured of it's success you'll never look back. Hubby and I reviewed our budget around Thanksgiving and found a few more places to trim and save more for retirement. Always a good feeling!

Melissa said...

If it's possible to believe in budgeting and stink at it, then that's me! I think I know what I'm doing and can estimate, but I never estimate everything. It's hard for me to keep track of it in a computer. Maybe I should try the cash thing until I get the hang of it? It's my nickel and dime spending that gets us (that would be the pretty scarf). I'll pop back into follow the discussion. Maybe I can learn something while I give our budget another shot.

Astyn said...

My husband had been using a strict budget for years before we were married. I was reluctant to adopt his money management style, but I have to admit that I have learned so much about making choices with my money. Money put your money where your priorities are. It is always so fascinating at the end of each year to look and see where our money has gone (to the penny..that is my husband) and ask ourselves what our spending says about us. Did we spend money on what is most important to us?

I look forward to reading this week.

We live in a Zoo! said...

THANK YOU FOR THIS POST!!! And the ones to come. You are right that there are not a lot of posting on this subject, its about time :D

Trina said...

It's the unpredictable parts of the budget that trip me up, as well as not following a zero-based budget. The bills always get paid, but if there's any money left over, it never goes where it should.

I bought new budgeting software last month (on Emily's recommendation from quite a while back, actually!), and I'm quickly becoming a devoted fan. Just firing up the software make me all smiley!

Looking forward to the week's posts!

Heather said...

Thank you for this!! I completely agree! What a great post. No matter how much money you make I feel it's important to save, know where your money goes, and try and get the best deal possible. I've recently fallen in love with coupons and I'm getting pretty savvy ;) Can't wait to hear more!

Valerie said...

I think this subject is so IMPORTANT. Money is one of the main reasons people fight. I would rather drive my not-so-nice car and live in my almost-too-small house, but be able to be comfortable money wise, then stress EVERY month on how I am going to pay for things.

My husband and I are grateful we have a little extra to put away for family vacations or dates, memories that will matter much more then if my kids had every toy and lived in a huge house. I also wouldn't want to have my kids feel stress from us becuase of our financial burdens or bad choices by spending money.

One of the best TIPS I can give, is get an allowance. I know that sounds funny, but being a stay at home mom has many benefits, just not "PAID" benefits. My husband and I decided on an amount of money that I could take out in CASH to spend on any "EXTRA" things for me or the kids.

We have been amazed out how much less is spent when we set a certain amount and use cash instead of just spending stuff here or there on a debit card.

Bloom said...

I am loving your comments. I think this is definitely a topic we will revisit -- it's good to get a pulse on what's relevant to you all.

Astyn - your comment is so insightful. your spending really does indicate your priorities to some degree. and it is fascinating to get a "big picture" look at your finances at the end of the year.

Valerie - wanted to respond to your "allowance" comment. I couldn't agree more. I think it's essential that you have some fun money that you don't have to account for - a predetermined allotment that you get each month to do whatever you darn want with! This was a big hang-up for us in the early years of our marriage. I wanted more autonomy, I felt stifled. The answer: "Em's Fun Fund" I get a certain amount each month to do whatever I please with - crafts, lunch with a friend, personal shopping, take a class, etc. It was a revolutionary change for us!

Also, we're living in a tiny (TINY) apartment right now. and as much as it drives me batty sometimes, tonight as I was making dinner, I thought to myself, "I am so glad that our expenses are low right now." We've really done some fun things lately and we wouldn't have been able to if we were up to our eyeballs in fixed costs.

anyway, great discussion. thanks everyone!

Sew Much Ado said...

I do love budgeting, I'd love it even more if I could stick to it better... And I also love Julie and Julia, I just watched it the other day. And I love your blog too, while I'm at it!

Joan said...

This would not be Em's blog without a convo about budgeting! I love it. Couldn't agree more with everything you've said, Em.

Carissa Rasmussen said...

ever since my husband and I got engaged we've planned our finances to the penny...I love budgeting and so does probably doesn't help that he works for an accounting firm and is an information systems guru and wrote his own program to customize our budget...exactly to what we need and it is AMAZING:) needless to say budgeting takes about 5 minutes a month:)i