Getting Back on Track
Summer is slowly drifting into the beautiful colours of fall. Kids are back to school, vacations are coming to an end, and the fun of all things pumpkin have begun.
Michael and I were having dinner with some friends the other night. They started a budget and are experiencing the excitement of taking control of their money. They’re understanding the freedom that a budget offers. It doesn’t confine you. It gives you the freedom to be able to spend within healthy boundaries that you can actually afford.
I had to giggle a bit when one of them mentioned all the birthdays, family celebrations and holidays they now have to save for. I giggled to myself because they’ve always spent money on those things, but they didn’t pay attention to how much or how it was affecting their finances. Now that they have a budget, they’re realizing where their money actually goes.
Christmas is another major shocker. Most people don’t save for it and then panic when December hits. They love being generous and getting everyone what they want. So they buy all the gifts and then put it on their credit cards in hopes that they’ll get it all paid off by February or March. The credit card companies love it as they see the interest payments skyrocket.
Yes, I said the “C” word. Christmas is only three months away. We’ve got family Thanksgiving dinners to save and prepare for, possibly Halloween, and then Christmas. All things that we typically spend money on.
As we come out of the summer months, when we usually spend a fair amount on vacations, gas, and eating out, now’s the time to refocus. If you’ve slacked off on your budget, or avoided one because you didn’t want to feel “confined” during the summer, now’s the time to get on track. September through November are great times to save up.
Getting back onto a steady work routine means that you’re typically spending less. Take the next few months to recalibrate and save. You’ve had some fun over the summer, so you can reduce a bit of your extra curriculars for a time. Hunker down and get creative. Put all that extra money away.
Create a Christmas budget. We want you to be able to enjoy Christmas without feeling like you can’t bless others. Figure out who you want to buy for and how much you want to spend on each person. Plan for an extra one to two people as well, as there’s usually someone that comes to mind closer to the holidays. Once you add up the total amount, divide that by two and a half.
For example, we have three sets of parents. So we’ll want to budget for all of them. There’s Michael and I, and then a couple friends. (Remember, this is an example). So that would be ten people. Say we spent $50 on each person. $50 x 10 people = $500 total. $500/2.5 = $200. Therefore, we would need to save approximately $200 per month from now until December to get all the gifts that we want for everyone.
Don’t forget the other expenses too though. You have Christmas dinner, a Christmas tree (if you buy a real one), and potential Christmas parties to attend (depending this year). So I would plan to budget another $100 a month extra from now until then for all of that.
This is why sticking to a budget is so important. None of this catches you by surprise. Michael and I plan for Christmas at the beginning of the year. We know that it’s coming, so we work it into our yearly budget. We create a new budget at the end of December for the following year, putting in all the major and most of the minor expenses we know will be coming up. Do you have a Costco membership? How about CAA? There are some annual fee subscriptions that we tend to forget about until we get a notice in the mail or see it on our credit card bill. Having a budget will help you plan for those things so they aren’t a surprise.
If you’re just starting a budget, that’s great! Now is as good a time to start. Just take it month by month. The yearly budget is our overview. Then we do the budget month by month for the rest of the year. Starting a monthly budget for you right now is great. You’ll have a few months of experience by the time the new year rolls around. They say it takes a few months to get comfortable with a budget anyways. Then, once you get into the rhythm and have a sense of your general spending habits, you’ll have a good forecast for the year ahead.
Let’s be prepared and save this fall. That way we can all enjoy this fall and winter, without having financial woes added to everything. Surprisingly enough, it actually helps make the winter months a bit more refreshing because we have one less thing to worry about. Having financial stability helps you be creative and enjoy more of life as well. You might even be ambitious enough to jump in the leaves or pull the old sled out and have some fun.
If you need any help getting a budget started or have any questions about budgeting, please send me a message. I’d be happy to walk through it with you.