Financial Wellbeing: Budgeting Checklist
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Welcome to the Be Your Own Date series on financial wellbeing and personal finance checklists. This post is all about budgeting.
Financial Wellbeing: Budgeting Checklist | Photo by STIL on Unsplash
I don’t know about you, but I absolutely love lists! Always have, always will! Writing lists and adding to them further down the line help me to be better organised, and somehow feels comforting and satisfying when checking things off, even if I don’t follow my points in order or complete all of them. I mention this because I think that it’s important not to be too hard on yourself if things don’t go entirely to plan. In my experience, lists are helpful for lots of things, everything from listing my yearly goals and being able to track my progress; to weekly shopping lists, helping me stick to my monthly budget; to daily to-do lists keeping me on track at work.
During the last few years, I have learnt so much more about managing my personal finances effectively, without feeling too restricted, so that my actions have become a habit and lifestyle choice that are pretty easy to follow, rather than something that I am dragging my heels on. Therefore, in this post, I am going to outline the key principles that work well for me and I would be very interested to find out what works well for you when budgeting to help manage your personal finances. Let me know in the Comments section and connect with me on your socials. As there is quite a bit to cover, I am going to spread this over a few posts, starting with budgeting, and in later posts, I will cover conscious spending (putting your budget into action) and saving.
Budgeting and Financial Wellbeing
A budget is simply a tool that enables you to plan how you intend to spend your money, whilst financial wellbeing is all about being in control of your finances and how you feel in relation to your finances. Financial wellbeing is so important, as it also affects your physical, emotional and social wellbeing. I personally use a monthly budget planner that I have developed. I also like to focus on the current month, as well as a month or two ahead. In the past, I have planned a preliminary budget for the year ahead and adjusted it accordingly each month. However, my current method helps me to live in the moment more and still gives me peace of mind - with a positive impact on my financial wellbeing - which works well for me at this time. Whilst a personal finance unicorn does not exist, budgeting certainly helps!
Personal Finance Unicorn | Photo by Annie Spratt on Unsplash
Be Your Own Date Budgeting Checklist ✓
Here are six key principles to consider...
1. Be clear on your personal finance goals. I find it helpful to break these down into more manageable chunks, such as short, medium and long-term goals. My goals inform my budgeting, so clarity around my intentions is key.
2. Think about and categorise your five main expenses: i. Living expenses - essentials (your needs) ii. Lifestyle expenses - non-essentials (your wants) iii. One-off expenses - periodic and unexpected costs (your wants & needs may change) iv. Savings v. Debt repayments.
3. Create a zero-pound budget plan (also known as zero-dollar, zero-sum, zero-based etc). I prefer to account for every penny that I earn, as this helps me to feel organised about my personal finances and also keeps me motivated. This approach might be useful regardless of whether you are employed or self-employed, or work part-time or full-time. Your budget plan may be handwritten or for those who prefer to use technology, a simple spreadsheet or word document works well too. Just keep it simple!
4. See if you can allocate part of your budget for guilt-free spending. I work hard and want to be able to enjoy the money that I earn and treat myself, once my needs have been accounted for, without feeling guilty about it. Perhaps you feel the same way too?! This can be a very small amount and is a simple gesture of being kind to yourself. If you are unable to do so right now, think about how you might put some time aside each month to simply focus on yourself and the things that you enjoy doing, and would like to do in the future.
5. Revisit your budget each and every month. Some adjustments may need to be made, and that’s OK! Getting into this routine also helps me to be more accountable for my spending.
6. Track your spending vs. your budget. At least at the start, this was helpful in ensuring that I was actually spending according to my budget. It’s also useful in highlighting areas that were not realistic - whether over or under generous - as well as patterns in spending behaviour which I may not have been aware of e.g. consuming wayyyy more soy chai lattes and meals out than I realised!
💎 My Personal Finance Gems
Listening to and watching Dave Ramsey and Chris Hogan on YouTube has been particularly eye-opening for me, and I have learnt so much about personal finance through their channels, which I enjoy tuning into regularly. Now, their content is mainly for a U.S. audience and I may not agree with all that they teach, nevertheless, it remains incredibly informative, motivating, and often makes me pause for thought about how I might improve my own circumstances and what is applicable to me in the UK.
These resources have proved invaluable in my personal finance journey:
Books
The Total Money Makeover by Dave Ramsey
I Will Teach You To Be Rich (2nd Edition) by Ramit Sethi
Your Money or Your Life by Vicki Robin and Joe Dominguez
Unf*ck Your Finances by Melissa Browne
Money School by Lacey Filipich
Rich Dad Poor Dad by Robert Kiyosaki
Research
Financial literacy research by Professor Annamaria Lusardi
Save money online
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Feel better about your finances. Be kind to yourself. Be Your Own Date.
~ Amy-Jo ☀️
Disclaimer: I am not a Financial Adviser, just a regular gal sharing my experiences and encouraging others to feel better about their personal finances. The content of this blog is provided for general informational purposes only and does not constitute financial advice.
