How to create a budget that won't stress you out.

Image: http://tiny.cc/on9xoz

Being that we're now in lockdown and I'm staying at home with my parents and siblings for the whole time, one thing that I genuinely miss during this period is working on my personal spreadsheet, since now most of my needs are being provided for without me having to expend from my own purse (thank goodness!). A few weeks ago before all this happened, I'd grown used to filling in my budget spreadsheets with weekly expenditures. I'd sit down with my laptop every Saturday evening and begin figuring out the best way to fit my large personal expenditures for the following week into my small available income. 

While budgeting and following a specific budget structure might be stressing to some, I personally find it very interesting.

Budgeting can mean to stress us out in most cases because we somehow tend to want to follow very many rules. Yes, sometimes we learn a lot of phenomenal ideas about managing finances that promise to be life-changing, but then we end up getting stressed and even frustrated by those same ideas.

Every time we learn something, we ought to adjust it to suit our personalities and unique situations. Not to encourage our bad habits as it might seem, but to apply it in such a way that betters us as opposed to being inflexible with the original idea.

For example budgeting: we need to look out for the key importance(s) of a budget and then adjust the idea to fit our situation and personality, as opposed to following a bunch of budgeting rules imported from say a country with a totally different economy.

The key importances of Budgeting are:

1. To control expenditure

2. To tell our money where to go, as opposed to constantly wondering where our money went.

3. To be in control of our money, as opposed to our money controlling us.

4. To help us plan our way to financial independence and beyond.

If my budget can do this for me, then the rest of the issues are quite negligible.

How to draw a budget that doesn't stress you.

1. Do a month of spending freedom.
Before you start budgeting, simply pay attention to how you already are spending, how you naturally prefer to spend your money, ensuring that you write down every penny you spend and what you spend it on. 

At the end of this month of freedom you will clearly see how you have been spending your money. You may feel a little embarrassed at the large amount of your hard-earned money that you spend on things you don't logically find very important, the same way I felt when my month of spending freedom revealed how much money I spent just eating out.

"Eating out" (any want but not need) is not that bad as long as you are:

- Aware of how much of your monthly income you are spending on it.

- You are fine with that amount (logically speaking).

- Self-disciplined at spending a specific "eating-out" amount.

2. Remember your budget is as unique as you are.

If my friend and I earn the same money, it is okay if she/he spends Ushs 40,000 (about 10.8 dollars) a month on eating out while I spend Ushs 400,000 (about 108 dollars) eating out. It is okay if my friend spends Ushs. 400,000 on giving and charity every month while I spend Ushs 40,000 on the same. 

Don't try to force yourself into what other people think is the most reasonable percentage to spend on A or B.

If you are a very generous person, budgeting will frustrate you if  you force yourself to give way below what you would want and are reasonably able to. The month of spending freedom usually reveals this.

Not to get you confused, I am not saying you budget to spend your money the way you feel like whenever you feel like; no, it is allocating a bigger percentage of your available income to expend it on things that are of greater value to you as a person.

How to budget?

Put as many things as you can in your budget.
I used Dave Ramesy's sample budget in his book The Total Money Makeover, removing such things  as were not relevant to me in order to make the budget more suitable to my own situation.

I loved the fact that he puts such things into his budget: repairs and replacements, money to blow, eating out, gifts, hair care, cosmetics, vacation, personal education, of course after more pressing needs like tithe, food, transport, rent, water, electricity, toiletries and giving. Yes, giving is among the top needs for one to budget for!

Even if you do not have an income (yet), it is considerably better to develop the habit of writing down your expenses. You will be grateful about how much God has provided for you, and it'll also make budgeting easier for you when you start earning.

3. Your budget should not master you, you are your budget's master.

Yes, self-discipline is key and is one of the key importances of a budget, but it is not healthy if you feel like a prisoner to your own budget, you will eventually give up on the whole idea!

I remember not so many months back, I had fully used up the "giving account" money as per my budget for that month, including the leftover giving money from the previous months, and yet there was more need to give. Oh, what an amazing feeling it was that I was able to help out yet another person! Though I also couldn't help being bothered by the fact that I was already way above my giving account.

  "It doesn't make sense to have money on your eating account yet your giving account sincerely needs some more." I thought to myself. So I took part of what I'd spared for eat-outs and did the giving. What I'm trying to say here is that your budget is not cast in stone, don't feel guilty to get some money from one account to another, which sincerely has more needs that month.

The pictures above are screenshots of my personal monthly expenditure with figures altered for this purpose.

I love that item called to "blow", it is that money available to you to blow, just as the word is; to blow! It allows you to make one or two impulsive buys. Albeit, I'd advise you to use this account towards the end of the month. It allowed me to get myself a tripod for my phone, which I thought was an impulsive buy at that time, but with all these zoom meetings and YouTube videos we're making nowadays, it has eventually turned out to be a good buy, after all.

4. Remember, budgeting also includes items such as money to invest, saving, emergency fund, healthcare, retirement, etc. It doesn't have to be a large sum, even if it's Ush 5000 that you can put aside every month, first you are developing good money habits, two, that Ush 5000 will be Ush 10,000 after two months and then 100,000 after about a year and a half.

My eyes used to give me a hard time but I used to take the issue lightly, thinking it couldn't be serious. Until when I woke up one day, about two weeks after I had left work, and couldn't open my eyes anymore. I needed spects immediately. Thank God I had 95% of the money I needed in my healthcare account, which had accumulated over a few months.

If I had not faithfully put the small money in that account over those past months, my eyes hurting wouldn't have been the only stress factor that day_ borrowing money to cover the eye care bill would also have been added to the unfortunate party.

Emergency fund, was also another stress-saver. You can read the article that I shared about the emergency fund, so that your next emergency finds you fairly ready to handle it.

I personally love budgeting and I follow my budget because:

1. It is uniquely made for me.

2. I am not a prisoner to it.

3. It helps me take care of unforeseen circumstances.

4. I am mentally settled to know that I can wisely account for my hard-earned cash.

Thank you once again for reading this article.

It is not routine that I am thanking you, it is because it is truly a blessing when you read these articles and write back to me with your amazing feedback.
Thank you!