{"id":2279,"date":"2009-02-05T05:00:53","date_gmt":"2009-02-05T13:00:53","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=2279"},"modified":"2023-05-22T12:03:58","modified_gmt":"2023-05-22T18:03:58","slug":"the-ten-minute-budget","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/the-ten-minute-budget\/","title":{"rendered":"The Ten-Minute Budget"},"content":{"rendered":"

Do you hate the very thought<\/i> of budgeting<\/a>? Does tracking every dollar you spend seem like a waste of time \u2014 or, worse, an activity guaranteed to curtail your spending “freedom”? Good news, then…you and I are a lot alike! But one month, after spending over nine hundred dollars<\/i> on clothes \u2014 and not realizing it until I got the credit card bill! \u2014 I recognized I needed to rethink my assumptions about budgeting.<\/p>\n

Overcoming obstacles to setting up your budget<\/b><\/i>
\nEven after reading a lot of articles and several books on how to create a budget (including some here on Get Rich Slowly<\/a>), none of them ever really stuck with me. I’d flip through them, thinking that they sounded great, but kept putting them off. Each month I put them off, though, was a month I veered dangerously closer to being financially “upside down”.<\/p>\n

I realized that I had two beliefs I needed to get past before setting up a budget:<\/p>\n

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  1. I felt like a budget would take a ton of time and effort for very little return.<\/li>\n
  2. I liked what I considered the “freedom” of being able to spend whatever I wanted, when I wanted to spend it.<\/li>\n<\/ol>\n

    The biggest issue I had to face, though, was admitting that I had a spending problem: I was spending every dime I made, and then some \u2014 and I couldn’t easily tell you where it all went.<\/p>\n

    After reading several personal finance books and becoming increasingly frustrated with my lack of spending accountability, I finally gave in, made a budget spreadsheet<\/a>, and tried it for several months.<\/p>\n

    Much to my surprise, creating a budget actually gave me more freedom!<\/b> Instead of having a panic attack when I got my credit card statement, thinking, “How am I going to pay this off?”, I knew where I stood every few days. Instead of forcing myself to pay cash (which is easily stolen, or used and then forgotten), I had an at-a-glance look at exactly what I was spending, and where I was spending it, every month.<\/p>\n

    But most importantly, I stopped feeling guilty every time I bought something for myself. As you’ll see in the videos that follow, I have a “fun” spending category. As long as I spend less than that amount every month on fun stuff, I don’t obsess over it. In this way, having a budget has been a huge stress relief for me.<\/p>\n

    Cash vs. credit<\/b><\/i>
    \nThe final problem I had to overcome was remembering to put everything in my budget. I decided to cure this by simplifying my life. Instead of charging purchases on several different credit cards, I ordered a rewards credit card and charged everything to it.<\/p>\n

    Not only did it give me cash back for everything I charged, but I was easily able to download the data every few days from my provider’s website. I also got rid of all my store credit cards \u2014 the small amount I saved wasn’t worth the extra time and hassle to put the numbers into my budget.<\/p>\n

    Many financial authors support a cash-only system in order to help get yourself out of debt, since spending cash is more tangible than swiping plastic. However, a budget, updated every few days with data from your card provider’s website, gives you the same knowledge of where your money goes immediately. Plus, a credit card offers consumer protections, down-to-the-penny accuracy, and rewards points!<\/p>\n

    J.D.’s advice:<\/i><\/b> Do what works for you<\/a>. If you have problems using credit cards responsibly, it’s best to stick with a cash-only system. Use your debit card and track expenses that way. If you know that credit won’t cause you problems, consider making most or all of your purchases with a single card.<\/div>\n

     <\/p>\n

    The 10-minute budget<\/b><\/i>
    \nIf you’re a visual person like me, you’re going to love this. Instead of a typical text-heavy, boring budget post, I’ve boiled down the entire task of creating a budget into two videos I call the “10-Minute Budget.”<\/p>\n

    The first video is a six-minute introduction. It describes some financial mistakes I made, and how those mistakes pushed me to make a budget. (Watch to find out how I spent over $900 on clothes in one month, and how much money I saved later on!)<\/p>\n