How to start a budget

Money. As much as it pains me to say it, it’s what makes the world go round. However, sometimes we can never feel in control of our money and it always seems to have slipped through our fingers as fast as it lands in our bank account. If this sounds familiar then you could benefit from making a budget. With the New Year fast approaching, it might be one of your resolutions to try and be bit better with your money or even just to try and save a bit more for an emergency or a back up, so I thought I would share how I overcame my fear of checking my bank account and put myself back in control.

There are thousands of blog posts and articles online and books about the ‘best’ way to make a budget, but I feel the most important thing when deciding how to start is thinking about what will work for you. I have tried so many different budgeting methods which didn’t work for me but it’s important to persevere to find something that does work because it will pay off in the long run even if it’s difficult to start with. It’s important also to bear in mind that it will never be perfect, you will need to make adjustments and tweaks as you use your budget and you shouldn’t beat yourself up about that. Acknowledge any mistakes and learn from them so that you can do better in the future. Below, I’m going to talk about the budgeting technique that works best for me and why, as well as some adjustments I’ve made over time so that I am more in control of my money and spending.

My favourite budgeting technique is the ‘Kakeibo’ method. Kakeibo translates as ‘household ledger’ and is a Japanese budgeting method created in 1904. The idea is that at the start of the month (or the pay month), the Kakeibo writes down all income and outgoings as well as how much they want to save that month. I don’t use my monthly Kakeibo to track fixed bills such as my mortgage or car insurance, only for everything that is left over afterwards. They then track every expense over the month and split them into four categories – Needs, Wants, Culture and Unexpected. There are some guidelines as to what would fall into each of these categories but I tweaked them to fit my own lifestyle so they look something like this:

Needs: This includes things like weekly food shopping, transport, petrol costs, childcare and any other everyday necessities that we can’t live without.

Wants: This category includes takeaways and meals out, monthly subscriptions, retail or clothes shopping and any other purchases that we enjoy but don’t really need.

Culture: Culture is for books, magazines, films, museum or show visits, music (such as a Spotify subscription) and charity donations.

Unexpected: Unexpected covers presents and cards for birthdays or events, repair bills, vets visits and any else that might come up in an emergency. (And as I keep telling my Husband, an out of budget takeaway is not an emergency.)

You can buy books that are ready set out for Kakeibo budgeting however, I bought a more basic ledger style budgeting book from Paperchase which works perfectly for me. The important thing is to keep on top of entries and input them everyday if needed so you don’t lose track or forget anything. I find it most helpful to budget a set amount for each category based on things that are happening that month (birthdays, holidays, etc) and then immediately put a chunk of income into savings. As I write down my spending, I’m able to keep on top of how much I have left in each category so I don’t overspend and then at the end of the month I can add anything left over into savings as well!

There are a few reasons why I’ve found this method beneficial for me. In the past, I struggled with overspending, buying things I didn’t need and hanging onto items that I had bought because I gave them monetary value even after I had bought them. Once I discovered minimalism, I was able to start the journey of letting things go and giving more value to the things in life that really mattered and brought me joy. The act of writing down what I have spent brings a sense of mindfulness to budgeting and makes me feel more accountable for what I use my money on rather than just spending and watching my balance go down. It allows me to review at the end of the month any areas that I think I have overspent or gone over budget and how I can do better the follow month to keep boosting my savings.

I’ve been using the Kakeibo method now for almost a year and although I’ve made a couple of tweaks here and there, I’m confident that I’ve finally found a budgeting method that works for me, helps keep me more mindful of my spending, and save as much as I can without sacrificing things I need to buy and things that I want to buy that bring me joy.

Let me know what budgeting methods you follow or have tried, or if you do try the Kakeibo method in the comments below. Thanks for reading today!

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