It doesn’t really surprise me when I meet people who don’t budget. I’ve been at it for so long and it’s become such a major part of my life that it’s rare I go a day without thinking about budgeting. But, I wasn’t always like that.
At one point in my life, I was one-half of a newly married couple that was 100K in debt! Deciding to set and stick to a firm budget changed our lives, our relationship, and our future.
If you haven’t yet started budgeting, I’d suggest giving it a shot – especially if you are in one of the following groups!
Budgeting is important for young adults as they begin to navigate life on their own. They’ll be faced with new expenses like student loan payments and possibly rent for the first time.
For many, this is the stage of life where either positive or negative money habits will begin to form. If positive habits form in early adulthood, those habits are likely to remain throughout their lives.
Young adults may begin planning for larger expenses like a wedding, purchasing a first home or car. These are all expenses that are much easier to navigate when budgeted for.
Newly Married Couples
A budget is really helpful for newly married couples because they may be merging bank accounts, spending habits, and even debt for the first time. You could have a situation where one of the partners was a budgeter prior to the coupling and the other wasn’t, where neither has ever followed a budget, or where both are dedicated budgeters.
A newly married couple may be paying off large bills from a wedding and/or honeymoon. They may be considering purchasing a new “Forever” home.
They are at a high risk of falling into poor spending habits as they may now have a newly combined income and the freedom and desire to eat out often, travel freely, and shop at will.
It is especially important to learn budgeting as a newly married couple begins to consider growing their family.
It is beyond necessary for every family to have a budget. Families need to know how much money is coming in and going out each month. When a couple adds kids to the mix, the spending and needs expand. Without a clear picture of what is going where, things can get sticky really fast.
The more people in the family and depending on the ages of the kids, the possibility for unexpected expenses increase.
Additionally, kids are expensive. People don’t just say that to be funny, it’s true! Have you seen the prices for organized sports and summer camps? These are often expenses you’ll need to plan for far in advance.
Other large expenses families need to budget for – travel. The cost of traveling exponentially increases (especially by plane) the more people you add to the family. Your weekly grocery bill will also explode with both an infant (formula and diapers) and teenagers (they eat allllll the food, seriously).
Using budgeting strategies to prepare for these things in advance will keep your family protected in the event of a crisis.
Single adults can also greatly benefit from a set budget. Oftentimes, single adults find themselves supporting themselves as well as dependent children on one income. There may also be a mortgage and car payment to consider.
For a single adult supporting a family on one income, an unexpected crisis can be completely devastating. Having a budget where you regularly add to your savings could be a true life saver.
Even kids should be learning about budgeting! I know they might seem young but I promise you, it will be worth it. The earlier you begin to teach your kids the value of money, the better set up they’ll be in their adult life.
Since my kids were 4 and 6 years old, I’ve had them use piggy banks to start teaching them the concept of earning and saving their money to pay for things. Now that they are 9 and 11, I’m working on introducing the concept of budgeting with them.⠀
I’ve created a great system for us and you can check it out here. I’m sure it will evolve over time but for now, they are learning the basics of what I want them to learn and practice as adults.⠀
When kids learn budgeting strategies at an early age, they will bring those habits with them into adulthood.
I’m guessing you’ve gathered that it’s important for EVERYONE to learn budgeting. If you are looking for assistance in setting up your family budget, I’m here for you! Let’s chat about 1:1 coaching and I’ll help you set up a systems and routines that will work for your unique family.⠀
Back in 2008, my husband and I were young, naive, and nearly 100K in debt. Two years into our marriage, we found ourselves living paycheck to paycheck and barely making ends meet. We had no emergency fund to fall back on and we had no clue how bad our spending habits had gotten.⠀
We got ourselves into a huge mess and we didn’t know how to get out of it.⠀⠀
Many families are going through unprecedented and unexpected financial difficulties right now. With most states issuing shelter in place orders and businesses closing aside for essential personnel, we’re seeing a spike in unemployment like never before. Many people who never imagined and never planned for losing their jobs are now finding themselves unemployed and unsure of where to go from here. ⠀
Is There a Lesson to Learn from Being in Debt?
Believe it or not, waking up to only $10 in the bank was a blessing in disguise for us. It taught us a lot more than we ever expected.⠀⠀
We had to really dig deep and ask ourselves if the kind of life we were leading was the kind of life we wanted our kids to grow up in. Only then were we able to make some changes that have lead to us living the debt free life we now enjoy.
What Happens When you aren’t Financially Prepared for a Crisis?
A crisis can take many different forms. It might be an unexpected medical expense, a totaled car that you still owe on, a house fire, or an unexpected layoff. It could also be a global pandemic that cripples the entire nation leading to a complete financial crisis. If I’d said that last one a few months ago, I bet you’d have looked at me like I had three heads – but here we are.
Needless to say, our current situation was not anything anyone was expecting. And, it’s hard to prepare for something that you can’t even dream up in your worst nightmare. But, when we aren’t prepared for a crisis, that is when we are most vulnerable .
If you have been caught off guard in this crisis without an emergency fund, you can use this time to really evaluate and reprioritize your family goals. It may not feel like it right now but maybe it is also your family’s blessing in disguise.⠀
How Can I Get a Budget in Place Quickly?
If you’ve found yourself in a tough spot financially for the first (or maybe, second, or third) time in your adult life, it’s not too late to take action. Don’t throw in the towel. With a little hard work, some tough decisions, and some smart budgeting, you can get yourself out of this mess.
But, the first thing you’ll have to do is let go of blame. You can’t begin to make the necessary changes in your habits if you are holding onto blame – of yourself or others. Then you’ll need to establish a reliable budget and to stick to it.
Here are some simple budgeting tips:
You need to know exactly how much money comes in each month and how much goes out.
Develop a system or process to pay down your debt.
Begin to spend within your means.
Add to your savings each month.
Following these simple steps will help you prepare for the next crisis.
How Can We Prepare Financially for a Future Crisis?
Please believe me, having your finances in order and being prepared for a financial crisis does not make you a DoomsDay Prepper.
The number one thing to do to prepare for a future crisis is to begin saving money in an emergency fund. Open a savings account and begin to add to it each month. Look into accounts with the best perks, like higher interest rates and lower fees.
Start small if you need to. Make sure that you are working to build it up each month and only taking from it in the case of an actual true crisis.
I Can Help You Out
Having been where you are now, I know the range of emotions you’re going through. I know I never want to be back in the place and I don’t want you to be either. That’s why I’ve made it my goal to help others take control of their financial situation through budgeting.
If you’d like budgeting support, let’s chat about 1:1 coaching! I’ll help you set up a systems that will work for your unique family. Info here! Get your info here!
See if this sounds familiar: You spend an entire week working and getting the kids off to school and extracurriculars. But then you get to the weekend and your bonding time with your family gets spent with—wait for it—housecleaning!
At one time, I was of the mindset that I would spend my time cleaning our house because I felt really bad about having someone else do it. After all, I’m very well capable of doing my own housework, so why should I pay someone else to handle it for me?
But then, I realized that I was starting to feel resentful. My family and I would spend almost a full day on the weekend cleaning the house. Then, we barely had time to go out and do things before the weekend was over. It felt like I was trapped in a cycle of work, clean, crash, and then realize the weekend was done and it was time to start all over.
So, I figured if I can take back a whole day and spend it with family, it would be totally worth it to let someone else take care of the cleaning.
So, how was I able to find someone to clean my house and not break my budget?
By reallocating some funds. According to Thumbtack, a 3-bedroom house that’s about 2000 square feet costs (on average) between $150 and $250 to clean. If we just take the flat average of $200 as my goal, that means I’ve got to reapportion that much money for the housecleaning.
What did I cut in my budget for a housecleaner?
Starbucks — The average venti latte at Starbucks is going to run you around $5 a pop with tax. If you’re used to getting one each day on the way to work, you’re spending $25 a week or about $100 a month on (admittedly great, but overpriced) coffee. Cut out your Starbucks fix and you’re half-way there.
Eating Out — If you’ve got a family of four with outside activities, you know it’s just too easy and convenient to stop off and grab takeout rather than cook a meal. According to one survey, the average family of 4 eats out 18 meals a month and spends about $230 on those meals. Put that with the Starbucks and you’ve got $330 saved so far for your housekeeping goals.
Shopping for “stuff” — This one can be tough, but you know exactly what I’m talking about. You’re at the store for some home essentials, you have a set list of items to buy, and then you get sidetracked looking at the cutest sandals you’ve ever seen or the most aromatic scented candle you’ve ever smelt. So, you buy on impulse. Even if you were to cut back to the tune of $70 a month, when you put it with the dining out and Starbucks cut-backs, you’ve now saved about $400 for the month. That translates to two cleaning sessions with a professional housekeeper doing a deep cleaning of your home.
Your Cutbacks May Look Very Different Than Mine
While I shared with you what we did to get the money to afford housecleaning services, this is by no means the ONLY ways to find the money. The idea I want to share with you is that you look at what you’re currently spending. Be mindful and creative with where you cut back on your budget because we do spend way more than we think we do!
Determine What’s Important and Reflect That In Your Budget
At the end of the day, this was a win-win situation for me. I’m helping support the local cleaning business owners while they help me get back my valuable time with my family. Plus, it helps me keep my sanity since I absolutely hate cleaning. And my husband is 100% on board with this too—after all, happy wife, happy life!
One of the biggest dreams for a lot of us out there is the idea of becoming 100% debt free in life. Imagine that: no credit card bills or car payment, no worrying if you are going to make it to the next paycheck. Is such a dream even possible?
I am 100% proof that it is!
But before you start thinking that I’m going to sell you on some “get-rich-quick” scheme that is going to take care of all your money woes, let me set your mind at ease. The real question for you should be “How committed are you to getting out of debt and (most importantly) STAYING out of debt?”
Every week, it seemed like we just wanted to throw up our hands and call it quits on the plan because it was so hard to say no to things like social gatherings, vacations, eating out, and shopping sprees. But in the end, we managed to stay the course and rid ourselves of $120,000 of consumer debt.
How did we pull off this miracle paying off debt? Here’s what we did that you can do too:
1. Get clear on every cent that comes in and goes out.
That means create a detailed budget so that you know exactly how much you are spending. Don’t just check your checking account. The real culprits are how much you are racking up on credit cards for nonessential items each month.
2. Once you know just how much is coming in, you need to axe every single expenditure that is not essential.
So, what qualifies as non-essential? Cable TV, subscriptions like Netflix, Hulu, Spotify, and yes, even, those regular lattes at Starbucks.
3. Work extra.
This may sound painful, but you can’t just cut money going out. You are going to have to add money coming in. If you are working hourly, pick up as many extra hours as you can. If not, look for a second job or some other way to bring in secondary income. This doesn’t have to be a lifelong commitment; just until you get a handle on your finances and get yourself out of debt.
4. The two biggest areas you can cut out, for most people, is eating out and going on vacations.
Instead, eat for much less by cooking at home and then save your money with a nice staycation.
5. Essentially, every single penny that comes in goes to pay off the essential bills.
After you cover your essentials, any money that is left over goes towards paying off the debt.
There should be no exceptions to this.
The bottom line is that you have to learn to live below your means and resist the temptations that crop up all the time to buy things that you don’t absolutely need.
We did this, day-in-and-day-out, for three years. It sucked (big time)! But it has been so worth it because now we get to enjoy our hard-earned money instead of saying goodbye to it every payday and handing it over to the creditors before anything else. This is also a HUGE lesson that we are trying to impart to our children so that they can start off on the right foot with money management.