When Tom Snyder coaches people in his church about how to budget, he starts by encouraging them to track their spending.
“If we don’t track, we don’t know when to stop spending,” he says. The retired engineer and financial coach in Grand Rapids, Michigan, adds that it’s easy to be bumped off track by irregular costs, such as birthday gifts or vacations.
Successful family budgeting is all about staying flexible so you can handle those irregular costs as well as unexpected challenges, including sky-high grocery store prices or rising interest rates. Financial experts like Snyder say that by using creative methods to dial in a budget and trim costs in some areas, you can often still find ways to spend on what is most important to you.
Follow your rhythm, not rules
Severine Bryan, a personal finance educator and coach based in Atlanta, says a budget needs to stay flexible and constantly adjust to challenges. One of the biggest mistakes people make, she adds, is thinking they have to follow a set approach, such as the 50/30/20 budget.
Bryan, who holds a doctorate in business administration, likes to track her spending with spreadsheets, but her college-age daughter prefers a more creative approach with visuals and graphs. They each use their preferred method, then communicate about spending when necessary. “It has to be a method you enjoy so you want to use it all the time,” she says.
Factor in variable expenses
“The default view of budgeting is annual, but I think that can be frustrating because it’s really hard to have a perspective on your entire year in one sitting,” says Charlie Bolognino, a certified financial planner in Plymouth, Minnesota. Instead, he suggests starting with a month-by-month approach, then taking time to layer in the less predictable costs such as holiday expenses. “We’ll never catch them all, but we want to reduce surprises as much as we can.”
Bolognino adds that while big expenses such as housing and child care…
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