Starting with a blank budget sheet and memory is the biggest mistake people make budgeting.
When you guess how much you spend where, you only remember a portion of it. You are blind to mindless spending.
You also probably remember the things that you enjoy that make you feel a little bit guilty. Oh, boy! I did get a massage! I did meet the girls for dinner!
Here’s the problem with starting with a blank budget sheet: you see you want to save, which is usually whatever is most important to you (vacation, home repairs, college), and you guess where to make adjustments.
As a result, you cut out the things you like and willpower never lasts long enough.
Fail… Try again next month.
Here’s what you can do to make this next month successful for you.
Track your money and categorize your spending BECAUSE you spend money on things that don’t make you happy/or are useful.
Just three months of tracking your money will change your life!
Getting clear on where the money is going is the first step to budgeting. You need to identify the problem habits and money/time that’s not serving you well.
It’s better to start with spending that doesn’t require willpower.
You have a gym membership you haven’t used in a year… Easy.
You realize that your grocery expenses are enough to be putting lobster rolls in the kids lunch boxes, but you throw away a ton of food and order pizza because you are too tired to cook… Buy less food, or an emergency frozen pizza.
There are a million examples, but the point is to start with the problem and not the one thing you do to take care of yourself.