The basis of the budget is that every dollar of income has a "job" and so as you use your income to spend, save, or pay off loans, there is never just an unclaimed chunk of money in your bank account tempting you to blow it on something unnecessary by breaking down your cash flow into manageable categories. It also allows for slip-ups, as you can update your budget categories throughout the month to adjust to real spend.
February will be my first full month of using this budget, and I've already found that I feel so much more in control of my money, and the panic and stress that I used to associate with financial planning is starting to subside. It's influenced me to be much more thoughtful about my spending, as I have to log each transaction into my spreadsheet. It's also allowed me to plan for future expenses, such as Emily's September wedding and a 2015 trip to Italy.
The trick, I think, is to set up the budget in a way that is encouraging - so following Meredith's example, I have a line for "Spontaneous Spending" so that I don't feel like a failure when I go out for impromptu sushi, fall in love with a dress, or have to repair a watch. That and using pretty colors in the spreadsheet.
yay! |
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