We've talked about budgeting on our blog, and we've talked about anxiety and money. Today we're combining these two topics to offer some tips on how to manage budgeting when it feels really hard.
Last week in our post about Tips To Help You Meet Your Financial Goals, we discussed how a budget is a great way to do just that. Budgeting is a common practice lots of people implement in their financial lives to save money and work toward their goals. Though there are lots of different variations of budgeting, essentially a budget is a helpful tool to spend your money intentionally so that you can make sure you're leaving room for your financial goals.
One of the things we like at Untangle Money is the non-budget budget. That is, looking at your take-home income, subtracting your must pays*; then looking at your retirement goal and investing that money (that’s what people mean when they say ‘pay-yourself-first’ - which incidentally we find a horrible turn of phrase because it doesn’t feel like that’s what it means); and then the left-over is your Flex Money that you can spend on whatever you want. Your retirement goal is that part that requires trade-offs, because you are taking from potential money spent now. You need to determine what you want for your future self, versus how much you want for your current self.
*Committed Money in our terminology, or fixed-costs in accounting terminology - we break out Debt so that users can see how much debt burden they are holding.
Another good thing to think about is what is your take home pay per hour - take your take home pay… divide it by 2000 hours (that’s the amount you work if you work 40 hours a week for 50 weeks) and figure out how much you make per hour - try to think about purchases in how many hours you work and see if that object is still worth it for you.
We believe the Untangle budgeting method is a great way to ease any stress that comes with managing your budget. If you know how much money you can spend freely (at Untangle Money we call this your flex money), this can reduce how much time you need to spend on it. Your budget is a guidepost so that you know you’re staying on track with your finances.
With that being said, although budgeting is a great way to organize and track your money, sometimes it can feel really hard - especially if you're just starting out. Personal finance and managing your money tend to be taboo topics, especially among women, so they aren't talked about enough. Handling your personal finances can be overwhelming sometimes, but we assure you that you're not alone with that feeling!
What's important to remember is that budgeting is a process that will take time. That's why today we want to offer some helpful tips and suggestions on how to manage your budget. These are things you can incorporate into your current budgeting and personal finance management, or if you're just starting out, that should ease some of the stress.
1. Schedule time to manage your budget. ⏰
A great way to manage your budget is to set aside a specific day of the week or month to check your budget, update and organize it. For example, if checking your budget weekly is too stressful, you could set aside time at the beginning of the month to set yourself up for the month, and then at the end of the month to reflect and track where you're at. You can even just set aside one day of the month if that feels easier for you. It's important to be mindful of when and how budgeting brings you stress. You don't need to be checking your budget every day or filling it out every time you make a purchase, etc., but you can certainly do so if that works for you!
2. Budget for things you enjoy (within reason). 😍
Budgeting can feel really hard because it can feel restrictive. Many people have the mindset that having a budget and managing your finances means cutting a lot of things out and living a super "frugal" lifestyle. This is not true at all! Having a budget, managing your finances, and/or living a "frugal" lifestyle don't mean you need to cut everything out or sacrifice the things that bring you joy. It's best to think of it as living within your means. While you may have to give up some things or limit yourself, it's very easy to incorporate the little things that bring you joy into your budget while staying on track to meet your goals.
3. Set boundaries for yourself and your finances. 💭
Remember to set boundaries for yourself - and this comes in multiple ways. For starters, budgeting is great for your financial life, managing money and reaching your goals -- but it shouldn't take over your entire life. Don't let it be something negative. Like we mentioned above, there are steps you can take to make sure your budget is working for you, just remember it's there to help you.
Another great way to set boundaries is to not let the pressure of others distract you from your goals. The point of having a budget is to stick to it to be able to aid yourself financially, and it is so important to try not to let any outside influences change that. This goes for anything from being pressured to go out/eat out, to making big purchases. Remember that you have a plan and have set aside a specific amount of money for leisure or fun expenses, try to stay within your budgeted amount.
4. Be ok with your budget needing adjustments. 💸
Over time your budget will change and need adjustments as your income and your expenses fluctuate -- this is normal. Unfortunately we can't predict the future (😒), your life will change and unexpected expenses or changes in income and expenses will arise. But no need to stress! The great thing about budgeting is that it's adjustable and easy to change up as needed. You can also plan ahead and have an unexpected expenses and/or life happens (emergency funds) section of your budget so you're prepared for whatever comes your way. Regardless, don't fret if your current budget is no longer working for you and you need a new one.
5. Make budgeting fun! 🎉
A great way to manage your budget without feeling like it's really hard, is to make it fun! There are lots of great budgeting apps, templates, and resources out there that you can use to make your budget. Some people like to use apps or websites or services that provide a budget for them, and some people like a more DIY approach -- it all depends on you and your needs. But we definitely recommend trying the Untangle Money method we mentioned above! But regardless, make it fun! If you're DIY-ing your budget on a spreadsheet, make it your favourite colours to coordinate things, add colourful graphs, and just make it appealing to you because you're probably the only one who will see it anyways!
Also, make sure to celebrate the fact that you're taking the necessary steps to set yourself up for financial success -- that's huge! You can also think of it as something to be grateful for. Like we said, your budget is a tool that is there to help you and your financial future, that's definitely something we can be grateful for!
6. Remember why you're budgeting. This is a means to an end! 💰
Probably one of the best tips we can offer you to help make budgeting easier (or at least less stressful) is to remember that it is a means to an end. Like we mentioned above, and in previous posts, the point of budgeting is to track your money coming in and going out, which will help you to meet your financial goals (like buying a house or retirement, among others). Restrictions and limitations will differ person to person depending on your spending habits and what you want to achieve for yourself with your money. But the restrictions now will allow you to have more financial freedom later on. Your budget will be a tool to help you spend your money intentionally so that you can make sure you're leaving room for your financial goals.
An important note: Having a budget is a great start to taking control of your personal finances and planning for your future. But, to take it a step further and ease your budgeting stressors, you should also consider having a financial plan, and looking into investment and savings strategies. These combined with your budget will help give you a clearer path to reaching your goals and managing your finances.
What's next?
In case you didn't know, we've launched a book club for Why Women Are Poorer Than Men by Annabelle Williams (mentioned above). Exploring injustices from pensions to boardroom bullying, Annabelle Williams shows how society conspires to limit women's wealth. You'll learn exactly what you need to know about financial inequality in this game-changing book that exposes the gender wealth gap. You can sign-up through this link, or message us your email on any social platform you follow us on.
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Financial independence is a huge part of being a strong, independent person, and it is our mission to help women, and anyone who doesn't feel safe or welcome in financial spaces typically dominated by cis men, set themselves up for financial success.
At Untangle Money we help women understand their (real!) financial picture, and obtain financial guidance from people that actually, really, get it; this is why we offer affordable options so that we are accessible to everyone. We would love to help you, too! Join the community of hundreds of other women looking to strengthen their financial well-being. You can check out our products and plans here or get in touch for a free consultation!