The Austerity Diaries: Creating a Budget…and Sticking to It

July 7, 2014
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by Daisy Luther

Lots of experts will give you excellent advice on how to create a budget. Creating a budget is pretty straightforward. You figure out your expenses, take this from your income, and then figure out what to do with the money you have leftover.

Sticking to the budget…that’s the tough part.

This is where most people experience financial failure. They know what they should be doing, but that little treat is just calling out to them, and they think, “One off-plan expense won’t matter.” Or perhaps they have a spouse who is not really on board with the whole budget business, and they are continually playing catch-up because of unplanned expenses. The economy is certainly not getting any better, so it’s essential to control your finances NOW. With careful planning, you can keep everyone happy, have the occasional treat, and still stick to your budget.

Budgeting is like dieting.

If you think about it, a budget is a lot like a diet. Everyone hates doing it, but sometimes our pants won’t zip, and we’ve got to do something about it. We figure out what our caloric intake should be. Every bite of food we eat should be measured and accounted for, and we subtract the amounts from the allotted intake.

Sometimes it’s necessary to have an off-plan meal – a piece of cake at a birthday party, a celebratory dinner out, or an ice cream cone with the kiddos. This off-plan meal has to be accounted for too, and can’t be done too often, or the diet will fail.

Loved ones will sometimes sabotage good intentions, either deliberately or thoughtlessly. They might be food pushers (come on, one bite won’t kill you), guilters (but I made this especially for you), or influencers (just because I buy chips doesn’t mean you have to eat them.) Whatever the case, the result can be the same – our careful plan is in shambles.

It’s exactly the same with money.

It is often the influence of others, no matter how well-meaning, that causes you to go over your financial “calorie limit.” If you plan carefully, you can allow yourself some wiggle room to enjoy something outside of your regular diet (or budget). For example, when dieting, if you know that you have a party to attend, you might eat fewer calories for a day or so leading up to the event so that you can splurge without guilt. When budgeting, if you know there is an outing planned, you might cut back a bit on the grocery bill that week to have extra money to spend during your event.

When dieting, if you want a treat, you can have it – but you might be eating steamed veggies for the rest of the day if that treat is the equivalent of your daily caloric intake. Likewise, with spending, if you want a Disney vacation, you can have it, but you might need to live in your uncle’s car since you won’t also be able to afford to pay for that, your mortgage, and your car payment. Eating whatever you want can have unpleasant consequences. So you can spend whatever you want.

How do I create a budget?

Creating a budget is simple. In one column, you have your money in, and in another column, you have your money out.

Money in might be:

  • Salary from work
  • Bonus check
  • Tax return
  • Alimony or child support
  • Rents due to you from the property you own

Money out might be:

  • Mortgage/rent
  • Utility bills
  • Credit card bills
  • Car payment
  • Insurances
  • Loan payments
  • Groceries and miscellaneous spending

Your first step is figuring out those two totals. In most cases, your money in will be more than your money out. If it isn’t, you have a serious problem, and you need to look at lowering your fixed expenses ASAP, or your financial problems will spiral so far out of control you’ll end up destitute.

Assuming you have some money left over, this is for your variable expenses. You may want to allot this money to savings, to preps, to paying off debt, or to spending money for the members of your family.

Are you surprised when you see the numbers there in black and white? Maybe you bring in more than you thought. Perhaps you are spending more than you realized. Either way, now that you can look at it all on paper, the next part will be a lot easier.

Ditch the credit cards

If you are going to keep spending money using credit cards, you might skip the rest of this article. You’ll be paying exorbitant interest if you don’t pay them off in full each month, and what’s more, it’s impossible to control spending when people can just swipe a card. This is especially true if other family members who are not as budget-conscious have access to the cards.

Lock them up in your safe and use them only when it is necessary. Then immediately pay the balance off in full.

How do I stick to the budget?

Planning the budget is easy. Anyone who can do basic math can create a budget. But how do you stick to it and get your finances under control?

Control. That’s the keyword. This is the method that I use. Feel free to adapt it to your situation.

I have a bank account that I use specifically for fixed expenses. All of my payments out go through that account. Everything that is not earmarked for bills comes out of the account. I don’t carry a debit card with me for this account, to reduce the temptation of knowing I have that money there. (“Maybe I could just buy this and replace the money quickly before the bills come out.”)

The money that comes out of the account is immediately organized and put into Altoids tins. (Finally another use for those little tins!) The tins go into the safe until they are needed. It’s like the envelope method but in a different container.

If there is money left over after I’ve sorted my variable expenses into the Altoids tins, this goes into my wallet and is my spending money. I keep grocery money in (you guessed it) an Altoids tin in my purse.

When spending grocery money, the change, and the receipt go into my tin, that way, I know I’m sticking to my budget for food. When the tin is empty, it means I’m out of grocery money. Sometimes I have extra money left at the end of the week, and that stays in the grocery money tin to allow me to make some large bulk purchases. (Learn more about stocking your pantry on a budget HERE and HERE)

Some of the variable expenses that I delegate money to are:

  • Emergency fund (Learn more HERE)
  • Gasoline (I’m going to need a bigger tin for this pretty soon)
  • Groceries/stockpile
  • College expenses (my oldest daughter is in her second year – this is for books, rent, etc.)
  • Preps (Learn how to get prepared step-by-step HERE)
  • Medical expenses/dental care
  • Vision care (Two family members need corrective lenses)
  • Clothes (growing kids!)
  • Spending money for family members
  • Gifts (a little each week towards holidays, birthdays, etc.)
  • Fun money (for road trips, school field trips, dinner out, and miscellaneous adventures)
  • Garden supplies (this is my addiction! seeds, plants, tools, oh my!)

It’s essential to prioritize these areas. Just because the tin exists, doesn’t mean that you have to put money into it each month. I’ve listed these in the order of importance in our family.

Having money in the tin does not mean it gets spent each month. The beauty of this is that you less frequently have a significant expense that you haven’t planned for. If my daughter needs new glasses, the money is there, available for the appointment. If we want to visit a museum or national park, we have some money set aside to do that.

Alternatively, if the tin is empty, the expense has to wait. Maybe the birthday celebration will be a bit more humble, the greenhouse will have to wait to be purchased for a few more months, or we’ll have to make do with clothing that is a little snug for a couple more weeks. Our entertainment will be limited to Netflix, a nature walk, or a trip to the library.

As I said, the key to this is control. One person has to be in control of the finances. I’m not recommending that anybody become a tyrant, doling out nickels after a family member begs and pleads. However, if anyone can just go and help themselves to the money that has been budgeted, this is not going to work. Unless both partners are entirely on the same page, the person with the best financial sense must hold the key to the safe. If you’ve just been shaking your head, paying off the credit card bill, and belly-aching a little each month, your family isn’t going to like this. You’ll probably have to listen to some adamant complaints. It will be worth it in the end when you have the peace of mind that comes with having your budget under control.

A budget is not about a total spending freeze.

Most people hear the word budget and automatically cringe, picturing a state of horrible deprivation, old clothes, and perhaps their big toes poking through that hole in their sneakers. Much like the word “diet” (see above), “budget” is thought of in negative terms.

I’m not going to lie…sometimes it’s like that, especially if things are really out of control.

But usually, at least after the first couple of months, it isn’t bad at all. Being on a budget doesn’t mean that you can’t spend money. It means that you plan for your expenditures so that you can afford the stuff of everyday life. It means that you pay for the necessities first and that you get the extras second. It means that you scrutinize where your money is going and make sure that your purchases are worthwhile – do you really want that fancy meal out each week, or would you prefer to put that money towards a fun family outing at the end of the month? It means that those expenses that you know will come up (like new eyeglasses) will be planned for, and they won’t make an enormous dent when it’s time to pay for them, leaving you rolling pennies for gasoline to get to work.

What’re your two cents on this?

If you haven’t really been able to stick to a budget in the past, what has been a fly in the ointment? A partner who was not on board? Difficulty planning? Lack of control?

If you’re good at budgeting, what are some tips you can offer to those who find it challenging?

Creating a budget is easy. Sticking to it is the hard part. Keep everyone happy, have the occasional treat, and still stick to your budget. The Organic Prepper
Daisy Luther

About the Author

Daisy Luther

Daisy Luther is a coffee-swigging, gun-toting blogger who writes about current events, preparedness, frugality, voluntaryism, and the pursuit of liberty on her website, The Organic Prepper. She is widely republished across alternative media and she curates all the most important news links on her aggregate site, PreppersDailyNews.com. Daisy is the best-selling author of 4 books and lives in the mountains of Virginia with her two daughters and an ever-growing menagerie. You can find her on FacebookPinterest, and Twitter.

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