Chandler: Budgeting 101
APRIL Budgeting 101: General tips for creating and sticking to a budget
This post is sponsored by BECU. All opinions are my own.
4 Things I’ve Learned About Budgeting
Ever since I can remember, I have been a saver. I had a ceramic piggy bank customized with my name that I would dump out and count weekly (though the number rarely changed). Outside of the occasional treat from the ice cream truck, I held on to my money like it was going out of style.
In addition to being a saver, I’ve always had the drive to be an entrepreneur. I started a business when I was seven with some friends called “Bead Babes”. We would make beaded jewelry and sell it to our friends at school, our moms, and some very kind neighbors. That really got me excited about earning and saving some extra cash! Bead Babes only lasted about a month, but a couple years later some friends and I started our own babysitting company. We all got CPR certified, put together pamphlets with our photos and information, then went door-to-door around the neighborhood advertising. We were determined to make money and the result was amazing. Babysitting brought in some cash until I was 16 and could finally get my first real job working retail at the mall. I still remember getting my first paycheck. I thought I’d hacked the system and was going to be rich in no time!
I went on to work many more jobs to put myself through college and then my husband through medical school. Each job taught me new skills, but all of them helped me better understand the concept of working hard to earn money, and more importantly, how to save that money. Here are four crucial things I have learned about budgeting…
- Find Your Why
Budgeting can become difficult, overwhelming and downright disheartening. But, when you have your “why,” it helps you to remain focused on the bigger picture and allows you to more easily delay gratification. For me, the goal is to pay off Dan’s student loans.
So, while we love to travel and would love to go back to visit China, we instead chose to do a more affordable trip to Seattle in order to save a couple thousand dollars to put towards debt. Now, you’re probably rolling your eyes thinking “oh, what a sacrifice, you HAD to go to Seattle” because I’m eye rolling myself. I think a common misconception with budgeting is that you have to cut back on so much you can’t have fun, you can’t go out for dinner, and you can’t buy that dress, but it’s not like that at all. It’s more about figuring out what is most important to you, while still allowing yourself to enjoy life. Instead of going out to dinner, buying the dress, and seeing a movie all in one night, opt for a matinee, then go out for happy hour and you can still have a fabulous evening.
I’ve also found it’s much more useful to set bite-sized financial goals. For example, instead of saying, “I’m going to pay off $50,000 in student debt,” say, “I’m going to make a $5,000 payment on my student loans in six months”. By setting more attainable goals, we can reward ourselves for the progress being made, which helps to keep us on track.
Once you find your “why,” whether it is to pay off student debt, buy a house, send your child to private school, etc., it makes saving and staying on budget a much more meaningful task.
- Make More Meaningful Purchases
I’ve started focusing on making quality over quantity a priority. Now, don’t get me wrong, I love a good deal, but oftentimes people get so focused on the fact that something is on sale that they’re blinded by the reality that they don’t really love what it is that they’re purchasing. I budget a certain amount of money (using the via their app) to spend on shopping each month, so instead of heading to River Park Square and spending my allotted amount, I will browse each store, take pictures of the items I like and think about what I’m eyeing for a couple weeks. After that time, if I still can’t stop thinking about something, then I will head back to the store for it and often times at that point it’s gone on sale!
Another way I like to look at my purchases is by categorizing them as wants or needs. I don’t know about y’all but it’s super easy to impulse buy the wants. Before I checkout, I try to ask myself, “Could I live without this?” and most of the time the answer is yes. I’m all about retail therapy, but sometimes that harmless browsing can turn into, “How’d I spend $100 at Target AGAIN and what did I buy?”. Take a minute to go through your pile of clothes, makeup, groceries, etc. that you’ve been carrying around the store and ask yourself if all of it is necessary! Better yet, never go to the store without a list. I’ve learned this one the hard way more than once.
I also am always on the lookout for special offers around town, taking advantage of member programs like , which is offered to BECU members. Passport provides access to thousands of online discounts on travel, entertainment, wellness, vehicles, electronics, childcare, pet supplies, and my favorite, dining. You enjoy offers like a second complimentary entrée and other special upgrades at restaurants in the area and across the nation (when you pay for the dining upgrade--$7/mo or $75/year). Signing up for Passport is free to all BECU members.
3. Set Goals but Stay Flexible
As long as everything is exactly the way I want it, I can be totally flexible. Just kidding, kinda.
I learned that you can set goals, plan, and try to do all that you can to stick to your budgets, but life happens and you have to be flexible. Some things are just out of our control. You don’t plan on coming home to a flooded apartment, or someone smashing into your car when you’re buying donuts from Hello Sugar, or spraining your ankle, but these things happen (in my case, they happened all within three months of each other), and you don’t always have the choice to save for emergency expenses.
My goal with budgeting is to try to control everything that I can, and save for the uncontrolled, unforeseen expenses that come with being an adult. I didn’t ask to be an adult, but here we are, and with being an adult comes a lot of responsibility. I heard a quote the other day that said, “Being an adult is like folding a fitted sheet. No one really knows how.” and that hit me HARD.
A great tip that has positive results is taking a certain amount of cash out of your paycheck and separating it into savings accounts (which you can name on BECU’s online banking platform) for your rent, car insurance, health and dental insurance, school loans and even backup cash just in case you do get into that unexpected fender bender! That way, you can have the cash set aside for your bills and anything extra so you won’t accidentally spend that money. I like to do this through the I have a specific budget set aside for emergency expenses so I am always prepared for the unexpected.
4. Ask For Advice or Help
Fun Fact: I worked at a Wealth Management Firm for four years right after graduating from college. During that time, I spent my time learning about how to be a smarter investor, setting long-term retirement goals and helping clients set up their budgets. I would then follow up with the client and keep them accountable with check-in appointments to make sure they were staying on track. I loved this part of my job and loved seeing the excitement from clients when we organized their spending and worked to find areas we could cut back.
Setting up a budget is a highly personal thing, but oftentimes it helps to sit down with someone else and get everything organized. Thankfully, BECU offers a service just like this called the , and it can all be done over the phone! I wanted to experience it for myself and after a brief, but informative call with a Financial Health Check Specialist, I was able to really look through my current budget and break down what was working and what wasn’t.
I read “The 4 Hour Workweek” every year and agree with so many principles from author, Tim Ferriss. (Speaking of reading, I highly recommend you add a budget for reading and entertainment. I subscribe to Audible and it costs less than $15/month and really gives you something to look forward to each month. Which, if you read my last post on “” you know that I feel strongly about always having something exciting to look forward to). In the book, Tim talks about asking other experts, or friends you trust for their advice and what they’ve learned, instead of doing hours and hours of research yourself.
Ask for advice from financial professionals, tax professionals, bosses, coworkers, family, friends, your credit union, whoever will listen. The more we can learn, the better we will be able to decide what is best for us and how to set ourselves up for success.