Category: Budgeting

The Importance of Budgeting (and sticking to it)

The Importance of Budgeting (and sticking to it)

We Used to Waste Too Much Money

Most days we would buy fast food (or other convenient foods) for breakfast, lunch, and dinner; we generally just spent too much money on stuff we did not really need. In other words, we didn’t spend much time thinking about the importance of budgeting (and sticking to it).

Although we have never really lived “above” our means, we have definitely spent too much time living “at” our means. When we finally realized that the life we were living wasn’t sustainable, the first thing we did was start creating a budget. By budgeting we were able to do things like pay for our wedding, purchase our first home, create a nest egg, and no longer live paycheck to paycheck. Although we have been good about budgeting for the better part of our adult lives, it is definitely something you have to constantly strive to do and get better at; it takes a conscious effort to stay on top of it.

We Started a System that Worked for Us

When we decided to get married, we immediately started budgeting. We got married fairly young (19 & 21), so we didn’t have a thorough grasp on the ways of budgeting; nor did we have much familiarity with bank/savings accounts. Most of the money we had was always in cash form. So we started a very basic envelope system while budgeting for our wedding. It was a simple system; we wrote on each envelope what bill or fund that money was to be used for. We had envelopes for each of our utility bills; an envelope for our grocery money, an envelope for our wedding fund, an envelope for savings; basically, we had an envelope for every bill or obligation in our lives.

This system worked well for us for a long time. We saved enough money to pay for our ceremony and reception and all the other bills that come along with planning a wedding, as well as a 2-week honeymoon. Granted, we tried to keep our wedding as low-budget as possible, but it was still an elegant affair, which we thoroughly enjoyed.

The envelope system had worked well for us, but we slowly fell out of it; actually, we sort of fell out of budgeting altogether. Slowly, we reverted to the familiar, frivolous lifestyle that we had led before we got married. We leased a car we couldn’t afford, lived in a downtown city apartment that was overpriced and, basically, began spending too much money on things we didn’t need. Again. Once more, we realized that this was not a sustainable lifestyle.

We Began Giving Up Non-Essentials

We gave up our car, moved to a cheaper part of town, gave up purchases that were non-essential, and started cooking more and meal planning (click here to read about why you should meal plan). Oh, and we stopped using credit cards; if we couldn’t afford it right then and there, we couldn’t afford it. Period. We haven’t had credit cards in over 10 years now; they are something we actively avoid as they are merely tools for debt.

After renting apartments our whole lives, we eventually decided that we should try to purchase a home. We did the math, and our monthly payments for a house would be cheaper than renting an apartment (for more space!), and especially more affordable than renting a house. There was one catch, however: we needed more money. Purchasing a home is, obviously, rather costly; not only in the sense that they can come with a big price tag and a hefty mortgage, but upfront cash as well. At this time we were still in college and working, mostly full time, but we did not have a lot of money saved up. So, in order to afford all the closing costs of purchasing a home, we resorted to vigorous budgeting. And we mean vigorous.

To ensure our success, and because the cost of renting was becoming so unaffordable, we took even more drastic measures. We bought a fifth wheel camper and moved into it. We put anything that was non-essential into storage and actually sold quite a bit of our stuff as well. Over a period of time, this process allowed us to save a substantial amount of money. It did, however, take us close to two years to save and find a house that we wanted to buy and could afford.

Budgeting is not about giving things up; it’s about taking a serious look at what you are spending your money on…it’s about directing your money to where you would like to see it going.

Sounds funny, right? Obviously, you know what you’re spending your money on, you’re the one buying those things or paying those bills. But, everything adds up; we may not realize how often we frivolously spend five, ten, or twenty dollars or maybe even more. Budgeting is about looking at those things that you do not need to buy or pay for; it’s about directing your money to where you would like to see it going.

When we paid for our wedding or bought our house, we saw where we wanted that money to go; we directed our efforts towards making that a reality. We took a serious look at where our funds were going and made a conscious effort to redirect those funds towards the things we wanted.

In future blog posts on budgeting, we will show you the spreadsheet we use to track our bills and purchases. We will also discuss, in more detail, some helpful budgeting tips.

We hope you enjoyed learning a little more about us, our mistakes and successes with budgeting. If you have a story you’d like to share about your budgeting blunders or successes, we’d love to hear from you! If you have any questions on budgeting that we haven’t yet discussed, or more budgeting tips you would like to hear about, please let us know by commenting below or contacting us by clicking here!