When we first started our Total Money Makeover I thought budgeting was too rigid and didn’t allow any room for spending money freely (even though that’s what got us in trouble the first time). When we made our first budget, my mindset about spending still hadn’t changed. I was discouraged after my first budget because I realized some not so pretty things about myself. My first budget taught me things about my spending habits I did not want to believe were true.
How I felt about budgeting could be summed up in one sentence.
I dreaded it.
Creating a budget was stress inducing. Sticking to a budget? Now that just made me cry. When we created the categories for our budget I didn’t know how much I should allow for each one. Transportation? I don’t know! Eating out? Probably not too much. When I reviewed our first month’s budget I totally underestimated how much I spent on transportation, food, and other expenses.
Below are a few things my budget taught me about my spending habits.
#1 I Love Eating Out
I love good pizza. I love it so much that I will take the subway from New Jersey to New York City just to get a slice. There is nothing in the world like New York pizza, although I did find a place in Hoboken I love recently. Not only do I enjoy a delicious slice, but I also buy lots of almonds before class in the Duane Reade close by. And I just recently discovered how good Chick-Fil-A sandwiches are.
I guess there’s only one thing left to say. Hi, my name is Diana, and I’m addicted to food.
#2 Transportation is Expensive
Holy moly transportation is expensive. I really underestimated how much I spend on transportation and had to allot more for this category the second time around. There’s not much more I can do to lower how much I spend on transportation. I have to get to places, and I already walk whenever I can. Although it’s still a shocker whenever I see the end number!
#3 We have more debt that we originally thought
We use Everydollar to create our budgets every month. It’s a free online budgeting system and allows Danny and me to track our expenses even when he is on the road. Part of creating our budget includes categories for paying off debt. Writing down what we owe enforced why budgeting is necessary in order to reach our goal of being debt free. Now that we are getting close to our goal of being debt free it’s nice to see that number go down in our budget.
#4 Prepare for the Unexpected
It’s not possible to stick to a budget all the time, but this is when having an emergency fund comes in handy. We reached our savings goal of $1,000 in March so that will cover any small emergencies that may come up. We never had peace of mind before we saved some cash to act as a buffer between us and the unexpected. If something like a car repair were to come up it would completely throw us off our budget before. My first budget taught me that having a little bit of cash saved up allows for more flexibility when planning ahead.
How did you change your spending habits after creating your first budget?
As time goes on I think I’ll get better at budgeting and learning where to cut expenses. For now I’m happy at the progress we’ve made and I love that we are learning how to be smart with our money. I’m not extremely over reliant on our budget but it has definitely helped me reduce spending costs. Creating our budget helps me feel secure that our bills are being paid while getting on better financial footing. There are so many nice things I’d like to save up for in the future that I don’t mind cutting expenses now in order to get them on.
I don’t think of budgeting as strict or rigid anymore. Budgeting gives me the freedom to tell my money where to go instead of the other way around. I found the hardest thing about budgeting to be cutting down on miscellaneous spending. Those almonds I mentioned earlier come in small packs and cost me $2 a piece. I did the math and I end up spending about $30 a month on food just when I go to class. I still love shopping, don’t get me wrong, but now almost every purchase I make is planned ahead of time. Plus, I’d rather put those $30 I spend on almonds towards a new pair of shoes.
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