Budgeting

Many people don't like budgeting. It's often thought of as a negative exercise that only highlights all the wrong things you've spent money on and now have a lot of work to recall, record, tally and justify. And most of these folks dread the fact that they have to go through this same ordeal every month. It's not surprising then that they view budgeting as an onerous routine. When budgeting is approached as a one-time, marathon-like project occurring only one day in a month, I suppose that budgeting as a routine can be quite burdensome. But budgeting doesn't need to be. In fact, I propose that making budgeting into to many more smaller tasks that all occur on an even more routine basis will make the whole budgeting activity much simpler and enjoyable to do.

Rethinking Budgeting
Budgeting can and should be much more productive and meaningful than the once a month exercise to find and dump data into all of the prescribed spreadsheet cells by a certain day. Budgeting should be approached as the series of tasks you do to meet and exceed your financial goals. A much more effective money management approach would be to see budgeting as a process, comprised of routine of planning activities and a routine of tracking both your savings and all the expenses against what was planned.

Savings As A Pleasant Routine
Make the very first check out every month to yourself either by direct deposit or some other automatic means. It's your money and you deserve to benefit from it. Start with a general savings first, then set aside other specific savings accounts for any/all specific savings objectives; i.e., a new car, a vacation, a fancy night out, anything you feel motivated to save for. Also put a timeline with a few mileposts (like halfway there) on each objective. Hold yourself accountable to attaining the most important objective all the way down to the least and celebrate each objective that was attained.

Making Fixed Expenses Routine
Fixed expenses are regular bills that come to you at known times with consistent amounts. Quickly and simply write down which regular monthly bills are due when. Rent due on the first of the month may be easy, but other fixed expense bills are a bit more challenging to recall. An example might be your auto insurance due every six months on February 15th and August 15th. Instead of allocating the entire auto insurance amount in the months it's due, simply make those larger, longer-separated payments more routine and easier to handle by setting aside 1/6 of the anticipated semi-annual bill every month. This tactic requires a bit more discipline, but is one of the means for making the entire budgeting process simpler.

Adapting Variable Expenses Into Routine Budgeted For Expenditures
Variable expenses are 'irregular' in that they are not pre-known amounts due at regular intervals. These likely include items that you buy on a constant basis such as groceries, gas, even utility bill you pay, but also may include all kinds of optional or discretionary spending from Christmas gifts, to movie tickets to speeding tickets (if you have a lead foot issue)! The point is that these are all the 'other' expenditures you make beyond your regular bills during a given month. The best routines to follow here are to set a estimated budget for as many spending categories as you can find in your last 4-6 months of spending. Again the more specificity here the better i.e. the notorious whipped milk coffee drinks we all seem to make room in our spending habits for (I'm guilty too). If you do too, simply create a monthly budget for coffee. For each budgeted for item, create a labeled envelop and as often as each day, simply file every receipt you collect into the proper envelope. And with every receipt, just add to the running total on a blank slip of paper also included in each envelope. On the monthly budgeting day, simply record the final total for each expense and compare to the planned budget amount. Once you have a fine-grained view into all your spending, certain unnecessary expenditures should become apparent. In fact, look for as many of these money management opportunities to save as you can, especially if you are near to, or beyond the monthly net income you can reliably count upon.

Using this set of simple to follow routines, budgeting should become a highly effective process for managing your money. After only a few months of developing these positive routines, you'll come to appreciate what a good practice, budgeting can be.