Budget: Like a four letter word only not as much fun to use

I’m 32 years old and I’ve only been using a budget for the past 2 years. Budgeting is not something I enjoy doing, however, it does help illuminate why I run out of money before I run out of month. When you keep track of your money, some say keep a journal, others use Quicken or Microsoft Money, whatever you do, know how much you have to spend and then try to stick to it.

Time for a confession: I use a budget, but I rarely stick to it. It is just not the way I am wired. All my life people have told me how to do things. How to budget, how to eat, how to work. Ugh. Enough already. Find out how you work best, try various ways of managing your money. Get creative with your budget.

Personally, I prefer an Excel Spreadsheet and total my bills and subtract that from my after tax income and then divide by 31 and without any special money managing software I have a budget. Most of my bills are done through automatic bill pay. I have only 1 credit card and I keep the limit very low and most of the time I try to pay it off every few months. At one time I had $10,000 in credit card debt and I owed the IRS $12,000 dollars. I had to dig myself out of that hole and I still didn’t learn my lesson. The more money I made the more money I spent, finally I created a budget so that I would at least have a general idea of how much I had to spend each day/week/month. I also picked up some web design jobs and other technical side work so that I could spend more money and afford my luxurious lifestyle. Not everyone has this ability so you have to learn to say “NO!” to yourself and learn to be disciplined in your spending.  It takes time to find balance in your lifestyle and your spending, well, at least it did for me… but one thing for sure it is eye-opening when you create a budget and actually see how much you are spending each day.

Also, find ways to save money that keep you from accessing those funds. I use stocks and 401k because they aren’t easy to tap. I have an American Express for emergencies. In 30 days I can sell some stock if I absolutely have to, but I don’t want to so it forces me to make it a last resort.

401k’s are awesome and so if you work has one and they match a percentage then put in at least the percentage that they match. Where I work they have an Employee Stock Purchase Plan that allows us to buy stock at a 15% discount. Investing in something and allowing your money to work for you is actually much better than just using savings - but be smart, diversify, and know what your money is doing.