How to write a budget that works

Have you tried budgeting before and failed miserably? Me too. Many times.

In the beginning of our attempts to get our financial life in order, I was in charge of the budget. You should know that I hate numbers, finance, and planning. I like nature hikes, arts and crafts, writing, daydreaming, anything but looking at numbers.  As a result, my budgets were not my greatest creations. They were full of rounded numbers, estimations, and guesses. I would write a budget (i.e copy and paste from last month’s failed budget), never look at it until the end of the month, and then wonder why we screwed it all up. Can you relate?

While taking Financial Peace University, we learned about nerds, free spirits, and budgeting. Suddenly, our budget failures made sense.

Why was I failing?

  1. I was budgeting by myself. I was the only one who knew what the budget said and I was deciding on my own what was important. Then, I was using MY budget as a tool to nag my husband about HIS spending. I did not realize that it needed to be OUR budget if I wanted him to join in. That means, he has to agree with, and know, what it says from the beginning.
  2. Don’t put the free spirit in charge. I am the free spirit. Numbers are not my thing. Therefore, I was estimating because I didn’t take the time to look at bills. Honestly, I didn’t think the numbers needed to be exact in order for the budget to work. (Hint: They do. Every cent counts.)
  3. There was 0 accountability (because I was budgeting by myself). If I wanted to buy something that wasn’t in the budget, I bought it. If my husband wanted something that wasn’t in the budget (that he’d never even seen), oh how I nagged. And oh how we fought. Instead of working together, we were working against each other.
  4. I was only looking at the budget twice a month– once at the beginning to create it and once at the end to see how badly we’d screwed up.

The result? Failure. Disaster. 0 progress.

We had to make some serious changes to our budgeting process in order to succeed. I will not lie to you, the change was hard.

Instead of my 5-minute budget process, full of estimates and copy & paste, we had to actually get out each and every bill and budget down to the cent.

Budgeting once a month was no longer enough. Mr. Nerd (my husband) wanted to know what was happening every day. We had budget conversations all. the. time. And Ms. Free Spirit (me) got caught red handed. Before, if I overspent I just mentally justified my purchase and moved on. Now, I was accountable (on a daily basis) to make sure we stayed within our limits. Instead of lumping my extra spending into miscellaneous, I had to put it right under my name where it belongs. Man, that hurts.

Settling in…

Over time, we both settled into our new lifestyle. My wonderful nerd settled down a bit and we got to talk about the budget on a weekly basis instead of daily. I admitted that spending a dollar here and there is still spending and learned to avoid my temptations (Starbucks and Target, why are you so enticing??!). We learned that we could copy and paste most things from month to month and just update bill totals and add new expenses. The process became less painful…and it started working.

Since we were working together instead of against each other, we both started to watch our spending and held each other accountable to our goals. Bills were no longer terrifying surprises, they were part of the plan. Our stress level plummeted, our confidence skyrocketed and so did the numbers in our bank account. It felt like we had gotten a huge raise, all because we were learning to manage money instead of watching it slip away.

Doesn’t that sound great? It is! You should try it. (Like, right now, today.)

How to write a budget that works:

  1. Write your budget with your spouse or budget buddy*.

    Make sure you use a system that works for both of you. We use Every Dollar. There is a free option, but we upgraded to plus because it syncs all of our transactions into the budget and saves us hours. In my opinion, it is worth every cent.*If you are single, you should still have someone to hold you accountable to your plan (budget is just a fancy word for a financial plan). I’m going to call them your budget buddy. It could be a trusted friend or family member. It is important to have someone else who will call you out on your over-spending and push you to cut costs, save more, and reach your goals. Make sure that this person makes wise financial decisions in their own life so that they will push you in the right direction.

  2. Everyone needs to agree on the budget before the month begins.

    Warning: This may cause some fights in the beginning as you get used to holding one another accountable. That’s normal. It doesn’t mean you can’t budget together. It means you are changing and changing is hard. If you need to, take a break and finish the budget another day.

  3. Review your budget at least once a week and make changes as necessary.

    Especially in the beginning, you will forget things, screw up, and overspend. That’s ok. Give yourself some grace. You are learning something new. Just fix the numbers so that every dollar is accounted for and keep going. It’s not about perfection. It is about making life and your budget work together.

  4. Hold one another accountable.

    Kindly. Without nagging. Your tone of voice is everything. “Hey, I noticed there is a charge for $150 at Home Depot. Do you remember what that is from?” opens up a conversation. Where as “Why the $!*@ did you spend $150 at Home Depot?!” starts a fight. Be open to hearing the back story and reaching the solution together.

  5. Set goals for each month and celebrate your victories.

    You should always have a goal in mind. This goal will help you stay motivated and fight off temptations. If you need help setting goals, click here.

It is one thing to write a budget. It is another to make it work. Making your budget work requires crafting your life around what was written down on that piece of paper, spreadsheet, software or whatever you are using.

Hopefully, these steps will help you get control of your budget and start seeing financial success. If you have any comments, questions or other tips you’d like to add, please share them below!

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Author: Vanessa

Mom. Writer. Lover of all things DIY. My mission is to empower my fellow creatives to show money who’s boss, ditch debt and follow their dreams. Achieving debt freedom isn’t easy but our dreams are worth it!

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  1. Mary

    I appreciate these tips, especially number 3. I need to remember that sometimes things come up and it is ok to re evaluate once in a while.

    • I’m glad it is helpful! #3 has been a game changer for us. Before when things would come up and throw us off, we would just use it as an excuse to give up and “try again next month.” It has been much more effective to just work through the surprises because let’s be honest, things always come up ;). Good luck budgeting and thanks for reading!

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