With many of us living a more or less cashless life, it’s easy for our spending to get out of hand. It’s a good idea to know where your money is really going. Every month, you need to add up all your expenses; plus budget for saving, paying down debt, and emergencies. I used to just have a bill paying schedule, but I’ve discovered I need to be more involved in knowing where my money is going. Do remember that each month is different, so you need to do your budget monthly.
If you are married or in a committed relationship, you need to do this together. Make it fun like date night. Have a cocktail (not more than one!) and snacks. I know I may be old fashioned, but in our household, we have one account and one budget. There is only our money, not yours and mine. In my opinion, this is really the only way to make a budget work. But in any event, don’t compare yourself to anyone else, do what works for you.
There are apps and online tools that can be very helpful, or you can go old school and use paper and spreadsheets. Figure out your income for the month and work down to zero. Start with the big necessities: shelter, food, utilities, transportation, and basic clothing. Include entertainment, debt pay-down, and savings. Have a category for miscellaneous expenses- you never know when an unexpected expense will come up! Schedule reoccurring payments and keep track; checking your bill paying schedule every few days. It doesn’t help to make a schedule and never check it- I know this from experience.
Many financial experts recommend not using credit cards and only paying in cash. I think this is impractical. I use a debit card for most of my daily expenses and check my balance daily. For some people, the envelope method works well. You actually divide cash monthly for expenses. I think this would work well, especially for categories like entertainment. Allot a certain amount here and when it’s gone, you are done. No matter which method you use, it will definitely make you more aware of where your money is going. It will also assure you pay your bills on time!
KATHLEEN WEAVER-ZECH & DEAN’S TEAM CHICAGO