When Tom Snyder coaches people in his church about how to budget, he starts by encouraging them to track their spending.
“If we don’t track, we don’t know when to stop spending,” he says. The retired engineer and financial coach in Grand Rapids, Michigan, adds that it’s easy to be bumped off track by irregular costs, such as birthday gifts or vacations.
Follow Your Rhythm, Not Rules
Severine Bryan, a personal finance educator and coach based in Atlanta, says a budget needs to stay flexible and constantly adjust to challenges. One of the biggest mistakes people make, she adds, is thinking they have to follow a set approach, such as the 50/30/20 budget.Factor in Variable Expenses
“The default view of budgeting is annual, but I think that can be frustrating because it’s really hard to have a perspective on your entire year in one sitting,” says Charlie Bolognino, a certified financial planner in Plymouth, Minnesota. Instead, he suggests starting with a month-by-month approach, then taking time to layer in the less predictable costs such as holiday expenses. “We’ll never catch them all, but we want to reduce surprises as much as we can.”Bolognino adds that while big expenses such as housing and child care payments are often fixed, other costs, especially food, fluctuate much more. While that means food costs can be high during months you are hosting dinners or going to restaurants, it also means you can trim them with shifts such as planning meals and shopping grocery store discounts.
Team Up With Your Partner
Being in sync with your partner is an essential part of the budgeting process, even though it can be one of the hardest parts. Instead of rehashing a money disagreement, plan your future together and get excited about joint goals, Bolognino suggests. Those conversations, he says, can strengthen a relationship because “it feels like we are aiming for the same thing.”Decide What’s Really Important
Cara Macksoud, chief executive officer of Money Habitudes, a money personality assessment company, says she, her husband and five children first decide what expenses are “nonnegotiable” together. In addition to food, that might include costs related to sports or private lessons, for example.Leverage Community Resources
Erin Voisin, a certified financial planner and managing director at EP Wealth Advisors in Torrance, California, says she has saved hundreds of dollars on toys for her children by picking up items from local moms groups and “buy nothing” groups. “I don’t want to pay full price, so I join groups that post flash deals or giveaways,” she says.Voisin has found her children’s holiday and birthday gifts from giveaways shared on those community social media pages, including a large Hot Wheels garage set that retails for over $100. She has also found ideas for free activities from Facebook groups, such as taking your kids to a pet store to look at the animals.
“Prioritize the roof over your head, food, a way to get to work and utilities,” Bryan says. “Everything else will fall into place.”