The Non-Budgeters Budget

by Nunzio Bruno

First of all I want to say thanks for such a warm reception. All the comments and discussions are great; I really appreciate the feedback and questions! The next topic I want to tackle in our still introductory series is going to be about budgeting. Now, before you roll your eyes then scroll that mouse wheel away I want to say something. When you dealing in fast and liquid funds mental math can get real fuzzy real quick. This is not instructions on how to measure your financial situation penny by penny. I’m a finance guy and I don’t even have time for that. What I want to do though is give you some insight on how to craft a minor plan together just to keep you and your spending on the honest side. Let’s call it more of a non-budgeters budget and the abridged version of it 🙂

1. You need a starting point. This is just one of those things you can’t avoid doing. However you decide to break it down (month, week, day) you need to have an idea of how your cash is flowing. The medium you choose to record this stuff on is up to you too. I love technology and writing stuff out by hand and so I use Excel or Google Spreadsheets for my big updates but keep a little Moleskine notebook for like weekly changes. Fixed expenses are expenses you are regularly paying out like rents, cell phone bills, utilities, car payments – you get the idea. Then do the same for variable and try to create some buckets to fill up like a "going out to eat" allowance, gas money, etc. Hopefully at the end of this exercise you’ll have an idea of what’s going out every month and what needs to come in to cover it – then the extra you should be saving!

2. Have some goals in mind. Nothing like a New Year to get you thinking about where you want to be or what you’d like to change this year. Financial or not if you have something you want to shoot for this coming year write it out somewhere. Make them as detailed as possible because the more detail and thought you put into them, the more conscious you’ll be of them as time goes on. You’ll really start to "own" your goals and aspirations. Writing stuff out also creates some accountability especially if you are leaving them places that you see every day – a post-it note on the bathroom mirror is one of my favorite places to put a goal up because I’ll see it every day.

3. Automate! This one takes a bit of effort on your part but once it’s all set up the autopilot is effortless. Take all the goals and buckets you created for yourself and go create a few different bank accounts. From your main checking account have funds automatically deposited into those other accounts on a day you choose ever month. For instance, I have a cruise coming up in February so I went and started a checking account for it. Every month I deposit funds directly from my everyday checking account to it. When the cruise time comes I’ll have hopefully unknowingly (well I mean I notice a little). The idea here is to remove yourself as much as possible from the choice and the actual "doing". Now you won’t be able to give yourself excuses as to why you haven’t been saving or that you’ve come up short this month. It’s also a great way to control spending – having a "go out to eat" account with a fixed amount will really limit that unconscious spending. The general idea here is to create efficiencies.

4. Lastly is prioritizing. You don’t have to divide equally as you are trying to conquer the goals you set for yourself. If something like this is really scary then just try saving a little bit each month and snowballing it into more and more. Go create an extra account and try it out. If you are feeling a bit frisky then try to allocate your funds as efficiently as possible. If you’re saving for a long term goal then you can afford to put smaller amounts towards it because you will have time on your side. If you are a consumption machine try re-working (or starting) an Amazon wish list and see if all the loyal fans can help you out. I know this works because I’ve seen the pictures via Twitter 🙂 You will definitely have to have a clear understanding of your wants and needs throughout this process just try to make sure that you understand the difference between the two. Then before you know it you’ll be in a better position to safely, economically speaking, acquire more and more of the wants with a little less of a sting.

Those are really my big four for budget creation and some of the rationale behind them. You can absolutely crawl Google for all kinds of templates but make sure you understand what ever one you choose. If you don’t understand it and aren’t comfortable with it you probably won’t use it – nope check that, you definitely won’t use it. If technology isn’t your thing then I’m all for using the ol’paper and pen motif. Just make sure that it’s somewhere that you see it every day, heck even take it with you. I’m not going to lie to you; it’s never easy starting out. But the idea is to make enough little changes that you carry with you every day that eventually you’ll be conscious of your newly adapted financial savvy and it won’t feel like work. Practice makes perfect right?!

Feel free to share any stories, suggestions, or questions in the comments below. I love to hear from you guys!

Nunzio Bruno
Financial Coach/Business Consultant
Financially Digital
http://www.financiallydigital.com