Balanced Budgeting-Find A Happy Medium

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Budgeting has become quite the buzz lately with plenty of great information out there to fill up your plate with ideas and innovative ways to stretch out that almighty dollar.  But do we ever reach a point where maybe it becomes an obsession?

You may recall the coupon craze that became so popular several years ago that a few networks decided to dedicate an entire show to the extreme side of this phenomenon.  The only part of the show I can recall was the walk-through at the end of each segment where the couponer showed off all their wares in a showcase fashion.  I couldn’t help but wonder how much of the products they buy expired before they could use it up or give it away to a good cause.  You can only consume so many cans of tuna fish and who really needs 25 tubes of toothpaste??

Start With Sensible Budget Goals

Statistically it can be proved that the more realistic you are with setting an outcome, the higher the chances are that you can achieve the desired result.  Budgeting is no different.  No matter where you are at in your budget journey, you need to be realistic with yourself.  If you are just starting out, perhaps you are overcoming a load of revolving debt or attempting to establish an emergency fund.  These are important first steps and may come well ahead of increasing retirement savings levels.

For those currently on a budget, you can work to set monthly, quarterly or annual savings goals and then tweak those as you reduce your debt load or increase your earnings streams.  Similar to setting fitness and health resolutions, you need to make sure they are something you can obtain.  It’s quite okay to set budget milestones as reach goals, but you don’t want to make them so aggressive that you get discouraged and give up.

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Don’t Forget to Manage Your Investment of Time

We all have those friends who will bust out a spreadsheet in a heartbeat to show you how frugal they are on their grocery bills or how they can track their utilities down to the penny each month.  Great, that’s awesome, and probably fills a void in a minimalist driven analytical person’s mind.  But I think we all need limits and spending hours each day tracking this is just not appealing or necessary for the average consumer.

The tracking piece of this has become much easier with the onset of some great (and FREE) tools such as mint.com and personalcapital.com .  Many credit card companies and banks offer a similar type of service if you use their credit and debit card products. Need help starting a budget? Check out these other cool apps for your phone here.

Be Able to Justify Your Hobby or Vice 

This may come off as controversial to purist budgeters or extreme frugalists.  But I’m going to say it anyway.  Once your reach a point of financial and budgeting independency, IT’S OK to spend some money on your hobby.  Work this into your budget the same as you would any other expense.  Now, this comes with responsibility and you have to be able to afford the hobby without sacrificing short and long-term savings goals as well as required family living maintenance.

Our family decided to take up wakeboarding a few years ago as a way to spend quality time together on summer weekends.  Now, this came well after I had established adequate emergency savings and had my mid-term and long-term savings goals automated.  So in other words, it was excess money that could be spared and didn’t cause an impact to any other areas of our budget.  It was a big step for us and one that we have not regretted.

Areas of Waste to Watch For

1-The easiest things to cut out of a budget are the ones you no longer use.  A quarterly or annual review of your monthly subscriptions is a great place to start. Eliminate ones you seldom or occasionally use.  Use the approach of cost in comparison to the value it brings you.

2-Don’t forget service providers that you may not consider negotiable.  Shop your insurance needs annually and don’t be afraid to ask for a better deal on anything that you write out a check for monthly.  Be bold and assertive, it’s your money.

3-Focus on some of the larger ticket items first.  Refinancing a mortgage to a lower rate, eliminating mortgage insurance, and getting your grocery bill under control may bear more fruit than obsessing over going 6 months without eating out.

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Balance The Other Side of the Equation

We often focus so much of our time and energy on reducing costs that we neglect the other side of any budget- income! Of course we want to minimize senseless costs and work towards eliminating debt over time.  But there are so many ways to increase your income now, it is really worth devoting an entire additional article just to that endeavor, which we will do at a later date.

Side hustling has become all the rage and can quickly become a viable avenue to assist in reduction of debt and bumping up retirement savings goals.  If you have an employer as many of us do, are you maximizing your income potential there?  Working yourself into additional projects and taking on more responsiblity can lead to big promotions over time. Does your boss know you want to take on more?

Bringing It All Home

Budgets are a key tool in helping you achieve your financial goals.  But don’t make them so restrictive and absolutely inflexible that it leads to abandonment of your goals.  Don’t forget to set aside time periodically to do a budget check up throughout the year and take advantage of the many new apps and tools to make this process easier.

—The Fiscal Savant—

*Information is for entertainment purposes only and should not construed as financial advice.  The views and opinions expressed are those of the editor.

 

 

 


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