This is a good topic. Sometimes budgeting can seem impossible. When we were going through some very tough times I didn’t even bother. When my husband was going through health problems and he was unable to work it seemed impossible. Then I had health problems and things got even worse financially for a couple more years. Frankly, I don’t know how we got through it and I’m still living with the financial impact.
Now that we are both healthier and fully employed again, I am determined not to waste the opportunity to turn things around. My first step was to take a complete and honest look at the financial picture. I listed all the people and institutions I owed and how much I owed, what the interest rates were and all the contact information.
I then got up to date with my bank reconciliation which I did in QuickBooks. I then ran a report of my transactions from QuickBooks and then exported it to an Excel spreadsheet where I found out what categories of spending and what amounts I’d spent for the entire last year. I did an annual budget for this year and broke it out into months. I included the irregular but predictable spending for the different months. It is the irregular expenses that have been my biggest problem over the years. Why should it be a surprise when the car registration comes due once a year? But I’d never planned for it so every year when the bill came in I’d worry how I would pay for it.
I’m trying to follow this budget I’ve made, but I find that I am spending more on certain categories, like food and over-the-counter medicine, for example, than I’d planned. So I am revising and refining the monthly plan before the beginning of each month. I think by the end of this year that I will have a much better idea of what a realistic budget will be. I haven’t gotten discouraged yet because I know this is a work in progress. Every day I spend time tracking all of my receipts and updating my QuickBooks and Excel spreadsheet. A little bit of work each day keeps me on track. A few days ago I got an installment loan here. My bad credit was not a problem and I got approved! How do I enter this loan record to my spreadsheet?
Still, I will give you that this will only work if income is sufficient and consistent and if there are no health disasters around the corner. I’ve made a commitment to myself to be aware of my financial situation every day and not put my head in the sand again.
I started listing my spending on a spread sheet. Cash,debit and checks in separate columns.
The surprise I got was it became so tedious, I spent less. But I continue. Incoming and outgoing,what it’s spent on,which store,the price of gas etc. Whatever it take to keep me on track.
I also found this article which I draw inspiration from.