"Don't spend more money than you've got. Don't spend money before you've got it."
- Lillian Vernon
A few months ago I was meeting with one of my 'clients' to go over how they did against their budget for the previous month and to create a budget for the following month. As we were creating their budget for the month of June, I asked the question, "Are there any birthdays coming up in June that I should be aware of?" The couple looked at me with a question mark on their face. "If so," I continued, "then it needs to be in your budget." The couple said that they had three birthday parties that month so we added a budget for those birthday presents.
"Wait a minute," the wife asked, "so we should also have a budget for Father's Day presents?" I nodded, of course. "Is there something we shouldn't budget for or do we have to put a price on everything?" the wife asked. The husband finally chimed in, and jokingly said, "Yeah, should I create a budget even if I just want to buy a pen?"
When I first began to create a budget for myself, I realized that I was actually pretty good with sticking to most of my budgets. However, time to time I did go over on something. After carefully analyzing my spending habits, I then realized my problem. My problem wasn't that I was overspending on certain areas I budgeted for, my problem was that I was spending on areas I never budgeted for. These items were not emergencies, if that's what you're thinking (we'll talk about emergencies at a later date). These were items I did not plan to buy, that I could have easily planned a budget for. Below is a list of some budgets you might want to create to help you better plan your budget.
Birthday Parties & Special Occasions
If you're like me and you have a big family, birthday parties happen every month (and depending on the month, they might happen every week). Set a budget for birthday presents, birthday parties you might be throwing for your kids, anniversaries, and for other Holidays that require you to spend: Thanksgiving, Christmas, Valentine's Day. Set a limit for yourself so that you don't overspend and then regret it. For example, for birthdays presents, you might set a limit to not spend more than $20 per present. After you set your budget for the month, try sticking with it.
Trips & Vacations
Before committing to a trip or a vacation, try to set a budget first. You should think about gas or other type of transportation (i.e. rental cars, plane tickets, etc.), the hotel stay, food, entertainment (i.e. theme parks, zoos, etc.) and the shopping you want to do. If you like to take souvenirs, don't forget to add that to the budget. Try to avoid the spontaneous trips to the casinos or Las Vegas. Instead, make plans and make a budget.
Big Purchases
When I moved to my old apartment, the goal was to make it look sexy. However, it takes quite a bit of money to make it look sexy. There were also some things we needed for the apartment such as an iron, a vacuum and a blender. I could have bought all those three items during the first month of us moving in. However, I decided to time my budget. The first month, I set a budget to buy the iron. The second month, I bought the vacuum and the third month we purchased the blender. Afterwards, I began to set a monthly budget to add to the sexyness of the apartment. However, it took time to purchase these items and every month there was a budget allocated for those items we wanted to purchase.
Remember, the goal is not to break your head trying to budget for the cost of a pen. The goal is to plan a lot better. Plan those dates with your wife. Plan for those birthday parties. Plan to buy that laptop that you need. Plan, plan, plan...and set a budget as you go.
Can you think of any other things you should set a budget for?
Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.
No comments:
Post a Comment