Now more than ever, it’s crucial to keep your finances in line. With concerns of being out of work due to COVID-19, it’s time to get serious and strict.
We’ve talked about whether or not a budget would work for you in the past article Do I Need a Budget? Considering the current state of affairs for many of us, it may be worth trying out in the next few weeks of changed work schedules and more importantly changed payments.
Personally, I’m a fan of creating my own budget sheet. It’s easier than skimming through dozens of templates that you would have to personalize anyway.
However, when creating your own budget, it can be really easy to just write out your usual bills and tell yourself how much you plan to spend. Do you think about all of the other little expenses, though?
Here’s just a few of the things that are crucial to remember to plan for when creating your monthly budget – especially as the needs of your budget may vary month to month.
Keeping a close eye on how much you spend on memberships is crucial for maintaining a balanced budget. The most common memberships and subscriptions people remember are their gyms and streaming services. There are a few others that may be less frequent, but still cost you money. These include wholesale clubs, AAA memberships, or other advantage programs you may be eligible for, such as AARP.
This is a category you want to maintain over time or decrease, if possible. However, most memberships and subscriptions are steady rates that allow more predictability when budgeting.
It may seem like a no-brainer but using this category as a goal setting strategy to ensure you put a set amount away in your emergency fund or savings account is helpful. Start with a small amount that you know is manageable and adjust your budget from there.
Remember, this is one of the budget categories you want to increase over time. You want to extend your budget for categories that grow your money, not waste it.
Listen, we all need a reprieve. I’m already budgeting out my pennies to spend with friends the day that we can safely say it is okay for many of us all to be together again. Until then, work on responsibly coming up with a set amount you feel comfortable spending. This includes bars, restaurants, fast-food, fairs, food trucks – you name it.
This is a category you want to maintain or decrease over time. A budget isn’t a budget if you spend more than you planned to and do nothing about it. Pay close attention to your spending habits and ask yourself, “when do I really spend a lot on going out?” For a lot of us, it’s summertime. So, plan accordingly and estimate a doable budget in this category monthly.
We can’t exactly walk around with our bums out, even when the sun’s out. For most of us, we don’t buy clothes monthly and don’t have to worry about setting money aside for clothing, shoes, jewelry, or anything of that nature. While I envy anyone’s self-control in that sector, it is still something that everyone should have a plan for. Even if it’s not monthly, this category of your budget should still take up a small chunk of your funds because you must consider things as small as socks and underwear – those count as clothes, too.
This is a category you should maintain or decrease over time. Like outings, you may find yourself buying new clothing in more costly bundles during seasonal changes. This can be planned accordingly when setting up your budget. For example, as warmer weather approaches, you can adjust your spending to allot for a bit more money towards clothes. Just remember that spending more than you planned defeats the purpose of a budget.
Ah holidays, where it’s all too tempting to play the “one gift for them, one gift for myself” game. In my opinion, it’s never too early to start planning for holidays. I suppose this could be categorized in with a savings account category, but separating funds aside strictly for holiday season early in the year can save you a lot of stress as the season rolls around.
The trouble with this, though, is that it can make it really easy to over-spend when it’s actually time to shop. With that being said, it may be smart to maintain or increase this category, depending on when you plan on implementing it into your budget.
Above all, what I cannot stress enough is the discipline it takes to tell yourself to stay within your allotted budget for most of these categories.
For all of the above, apart from those that would include putting money into a savings account, they include many things that are relatively optional. Of course, we all need clothes, gym memberships, and a time out from time-to-time, but you need to build the mental strength to tell yourself that if your outings category only allows you $150 for a month and you’re at $145 spent so far, you’re probably done for the month. It’s not a matter of “eh, I can stretch it out a little.” It’s about discipline to build yourself a stronger financial future.