Tag Archives: creating budget

Budget Basics – Wiggle Room in the Budget

Photo Credit: www.keepcalmomatic.com

Photo Credit: www.keepcalmomatic.com

When it comes to allowing wiggle room in the budget, there are two main and drastically different styles: Those who wiggle, wiggle, wiggle and those who are rigid, rigid, rigid. Despite being able to “go with the flow” across most areas of my life, regarding my budgets I do not like to bend—which has resulted in some seriously over dramatic breaks when the numbers don’t work themselves out exactly, I have to put less than I planned toward my debt, or I spend more money that I originally intended and/or planned to. As I accumulate more life experiences (and monetary moments that don’t go along with my perfectly budgeted plan) I keep noticing that my life—financially and otherwise—tends to be a little bit better when I loosen my grip on my extremely detailed, overly analyzed, and fiercely capped budget to embrace a little wiggle—where some wiggling is warranted of course.

After years of drawing a maximum budget line and never crossing it, I have finally convinced myself that I’d be better off with a new found mindset—determined to interweave the rigid budgeting strategies that help me stay on track and achieve my financial goals while incorporating some cushions that increase my ability to stay calm and happy on my journey to accomplishing them. While rigidity is the backbone of any budget, there are some specific types of sub-budgets that can greatly benefit due to some built-in wiggle room.

When Looking at our Sub-Budgets we must ask ourselves:

To Wiggle or Not to Wiggle?

Photo credit: Disney

Photo credit: Disney

Since setting a specific budget and saving the funds to pay for my upcoming wedding with cash, I have spent MONTHS refusing to add some wiggle room. It literally makes my stomach turn when I envision myself saving (not even spending—because that is how crazy I can be) $10 more than the reasonably budgeted amount my fiancé and I agreed upon. Through my rigid-budget-ice-queen-glasses saving more than the set budget looks like planning not to reach the goal we set for ourselves—so then what’s the point of the budget anyway!?!?! However, after much research, listening to firsthand accounts of others, and reflecting on my own personality downfalls differences when I’m stressed about money I realize that a wedding budget—or any other budget that is large in sum and typically created over several months—is a prime place to leave some wiggle room. The reality is that not planning on a having any “surprise expenses” doesn’t ensure that there won’t be any “surprise expenses”. Hence, the very definition of the word “surprise”.

definition of surprise

photo credit: Google

I encourage Type A Budgeteers (not a typo, I just invented that word. Go me.) to relinquish delusional grips on what can’t be controlled—the inevitability of surprises—when budgeting for a wedding or any other large scale event, and make good decisions regarding the matters you can control—which in this case is saving above the budget to give yourself room to wiggle during the process. When it comes to big money, it’s better to be safe than sorry. And if you are like me, feel free to give yourself a daily reminder that just because you save that extra does not mean you will end up spending it.  “I’m not a budget failure. I’m not a budget failure. I’m not a budget failure…”

Related Posts: Wedding Planning on a Budget: Shifting your PerspectiveWedding Budget 101: A Step-by-Step Guide to Wedding Budgets for the Financially Unprepared Bride-to-Be

gft-givingWhen it comes to gift-giving, I am a firm believer in over-budgeting and leaving room for the wiggle. While I struggle to leave a buffer on budget areas that are directly related to me, myself, and I; I actually would much rather over spend on others than under spend. Not only do I believe cheap gifting to be tacky behavior, but not letting my gifts represent how much I care about my loved ones leaves me with a “yucky” feeling in my stomach (truth: I was literally scrunching my nose up while typing that sentence—physical manifestation of “yucky”). That being said, the budget can’t be completely thrown out the window because my income is not limitless. When I know that birthdays, holidays, babies, and housewarmings are in the near future, I always over save to create a buffer. Then when I meet my girlfriends on their birthdays I can bring a gift and chip in with everyone else to cover the old lady’s tab 😉 My peeps are worth it a hundred times over. <3

Related Post: Holidays on a Budget

traveling - wiggle

I believe that the traveling budget deserves a little wiggle room for a few different reasons. The first reason is that “traveling” is a very broad term—are you traveling to Costa Rica or are you traveling to your grandmother’s house for Thanksgiving? If you are going on a big trip to an unfamiliar destination you are going to need to create more wiggle room than if you are traveling a short, familiar trek that you’ve conquered many times before. For a short trip, you’d be wise to establish a budget and then be sure you have access to additional buffer money just in case an unfortunate scenario, like car trouble, leaves you stranded in a Motel 8 for a night (that actually happened to me once). For big-time trips I usually create a buffer that totals about one-fourth of my entire travel budget just to be on the safe side. The most difficult part for me  regarding travel wiggle room is to detach myself from “vacation mode” after I get back and actually do something responsible with the buffer I’ve created and didn’t have to spend—hello impulse coffee table purchase that was the main catalyst in scaring me into better spending habits nearly two years ago…

Related posts: Saving Money on your Road Trip across the USofA

 Caution: No Wiggling Recommended Beyond this Point!

Groceries – I think food is one of the areas that people overspend on, and I really think my grocery budget has cut out more mindless spending more than budgeting any other area. Creating a buffer for your grocery budget is simply not necessary. It will open you up to being less aware of using what you already have, throwing away unused/spoiled food, and buying overpriced junk. It just makes you forget to be appreciative of food. Don’t wiggle!!

Monthly spending money – No buffer needed. Period. Start finding ways to spend your time that don’t involve spending all of your money. Trust me, it’s easier than you think.

Shopping – If you let yourself wiggle a little bit when you head out shopping (especially if you don’t tote around shopping bags too often) your wiggle is very, highly likely to snowball into a full-blown Harlem Shake. Before you know it your “buffer” has doubled your original budget and that’s not what “wiggle room” is all about. Set a shopping budget, grab some cash, and never look back.

Bills – Take advantage of the consistency that comes with bills—it might be the only good thing they’ve got going for them, right? Set those automatic withdrawals and forget ‘em. No wiggle room needed.

Head on over to BrokeGIRLrich to see more posts featured in this week’s Financially Savvy Saturday!

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For more information on how to gain control of your finances check out our Getting Started page by clicking the link in the menu bar at the top of the page. Which “sub-budgets” do you allow wiggle room in and where do you hold your ground mercilessly?

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 Brittany

Why Math Matters

I’ve heard ignorance is bliss, but is it truly? Maybe when you are only considering short term effects and reveling in this little thing called instant gratification—maybe that is when ignorance seems blissful. But what happens when you look past the present and begin envisioning your future—does that change the perspective of being ignorant? Ignorance is defined as “lack of knowledge or information,” and its synonyms include but are not limited to “incomprehension of, unawareness of, unconsciousness of, unfamiliarity with, lack of knowledge about, lack of information about…”

ignorance

I don’t associate “bliss” with any of those phrases or words, and I’m guessing that I am not alone. Various life experiences have taught me that when you are aware of expectations and what needs to be done, you are more likely to do “it” better—whatever “it” may be.  When it comes to taking control of your life (of which finances is only one aspect), ignorance is bogus, and it will set you up for failure or copious amounts of unnecessary stress.

Sometimes long-term planning is necessary, and if you are financially preparing for a large expense or extended period without pay (or both) MATH MATTERS. If you are me, you think math sucks, but because I want to increase my chances for smooth transitions and decrease my chances of facing seemingly-impossible financial obstacles, I take the time to sit down and DO the MATH…ahead of time! I have learned that consistently DOING the MATH keeps me from getting blindsided, which makes my life more enjoyable—now and later!

Thinking of taking mathematical steps to create financial stability is just like taking mathematically steps when planning for an upcoming race.

Thinking of taking mathematical steps to create financial stability is just like taking mathematically steps when planning for an upcoming race.

If getting into a financial mindset does not come naturally to you, realize you are not alone. Try comparing the financial preparation of DOING the MATH to the preparation necessary for something more familiar like running a race or doing well on a test. For example, running a race might seem a little daunting, but if you know the distance you will be completing, you can train appropriately so that by the time race day arrives you are prepared and unafraid. In contrast, if you are running a race, and you fail to make yourself aware of the distance you will be covering, you drastically increase your chance of being unprepared—and limping across the finish line with a side cramp and feelings of nausea.

Equation for Solving Upcoming Financial Burdens

 Take these steps and do the math to eliminate financial stress during times of increased spending, decreased income, or both.

Benefits of Doing the Math Ahead of Time

Elimination of Financial Anxiety: Because I’m looking to the future and kicking ignorance to the curb, the mystery of my financial future has disappeared and along with that financially-induced anxiety.

No late fees: If you run out of money before you make all of your payments, you will most likely be faced with late fees, but if you are mathematically prepared, you will have enough money to make all of your payments on time.

Increased Flexibility: Because you know what you need ahead of time, you can make sure you have what you need ahead of time..and then some. Being prepared actually allows for more flexibility rather than inhibiting it contrary to what many people think.

No Overdraft Fees: You won’t be overdrafting because you are financially prepared, and your bank account will always have money in it. Even if there is not very much money in there, you will know the exact amount…so you won’t make the mistake of spending more than you have.

Avoiding Debt: You look ahead to see how much you need, and you do some math to create a logical plan that helps you accrue the money you need in the time allotted. You won’t need to borrow money from anyone else.

For more information about gaining control over your finances check out our Getting Started section at the top of our page.

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 Brittany