When Your Budget Goes Off the Rails

10 Aug 2018

Right now, I’m working on the family budget.  And let me tell you, it’s equal parts fascinating and horrifying! Ugh.

We’ve known for a long time that we’re living above our means and we’ve decided now is the time to claw it back.  We’re losing money to “stuff” and that is definitely not OK.  We need to tighten our belts and smarten up so we can get a handle on our money and reign in our spending. And, as a bonus, keep our home and lives free of clutter!

The two main tools I’m using are Quicken and an Excel budget worksheet from the wonderful Gail Vaz-Oxlade.

Here’s the link to the worksheet  >> Gail Vaz-Oxlade’s budget spreadsheet

What both Quicken and Gail’s budget worksheet need is consistent and truthful application.  If you’re in denial about your spending and are hiding things, you’ll never be able to create a budget that you can follow! You need to get everything out in the open and start respecting both your money and it’s function.  Put Quicken (or your chosen financial program) to use as a means to keep track of where you’re spending your funds and be thorough! Account for everything from your daily java to your mortgage payments.

Otherwise your data isn’t worth a damn.

In Gail’s spreadsheet, you will see that she has the formulas in place to show you how much you are spending on Housing, Transportation, Life, Debt and Savings.  Each category is given a percentage of your budget.  For example, Housing should be 35% of your budget, Life should be 25%, etc.  Each section is then tied to the data you plug in and again, be honest about where you’re money is going.

So when we plugged in all the data from Quicken, we were quite horrified to see that we spend 61.44% of our money on “Life”.  In Gail’s budget worksheet, we should only be spending 25% on life! Yikes!

We’re a one income family, and though it is an excellent income, we still need to be more mindful of where we are spending.  As I go through the exercise of prepping our budget, I’m often surprised by things that I thought were important and really are not.

So here are the steps we’re taking to get things under control!

1 – Record everything – even though I think I’m good at recording things, I’m not.  My memory sucks, so when I take $60 out of the ATM, I sometimes (actually, often) forget where I’ve spent the money.  I now have a personal-size Filofax set up to record all my transactions, receipt or not!

2 – Enter data regularly – I can sometimes go a couple of weeks without entering data into Quicken.  Which kind of defeats the whole purpose of using it in the first place.  Set aside a regular day/time to do your data entry and then file your receipts in your home filing system.

3 – Reconcile your accounts – every month, get your program out and reconcile what you have with what your bank account statement says. Ensuring that everything matches goes a lot way to preventing fraud and can help you stay on track! Once your transactions are all matched up and you are sure there are no suspicious entries, you can shred any receipts you don’t need to keep.  Always keep receipts for anything with a warranty!

4 – Share, share, share – get everyone involved in the budgeting process, including your kids! They don’t need to know ALL the gory details, but they need to see how and where money is spent on behalf of the family.  You can use this time to teach them about financial management and how to set themselves a budget of their own to help them reach their goals!  Which ties in with…

5 – Have long and short term goals – having goals that are SMART (Specific, Measurable, Achievable, Realistic and Timely) can help you more easily stay on track.  Keep your eyes on the prize, as it were.  Working toward a specific goal is a great motivator in changing your behaviour!

I hope these tips and tricks help! Let me know in the comments how YOU keep track of your family budget.

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