Anytime I do an audience poll about why budgeting is so hard, the number one word that comes up is overwhelming. It's overwhelming to try and start. It's overwhelming to be in the middle of a budget and have things change. It's overwhelming to choose what goal you should be focusing on. Today on the podcast with Anna, we talk about how to address this feeling of overwhelm so that she can simplify the process and simplify what it takes to track and follow the plan.
Today on the Debt Free Mom podcast, I have Anna. She is a mom of two, married to her husband Philip. She works part-time as a florist and as a social media manager. She tends to be frugal, but the task of budgeting is overwhelming. Her hobbies include creative outlets like interior decor, drawing, floral design, and reading. So thanks Anna, for coming on today.
Yeah, happy to be here.
Thanks. So your big question that we're gonna talk about today is that you have tried multiple methods of budgeting including Pay Period Budget Academy, including the Debt Free Mom budget template and just haven't found something that you can stick to. Is that right?
Yeah, I would say that's a pretty accurate description.
When you say like , you're having trouble sticking to something, does it feel like the things that you've tried in the past, they're not working because like your spending habits and the budget itself don't align? Or is it the budget tool itself or just finding the time to do it? What could you say if you could pin the nose on, one or two things that you feel like are the reason that it hasn't worked in the past?
So yeah, I think part of it is. The overwhelming nature of getting started and learning a system and the time that it takes to input like each individual transaction just it feels, cuz it's like I'll get a week behind and then it's " oh my gosh, like I have a whole week" which isn't always that much, but it feels like a lot of things to input and like, how do I categorize this?
And like this, I spent at this store, I spent half of it was groceries, but half of it was consumables, diapers or something. And so those are in two different categories. So how do I reconcile that? And it's just sort of the details of doing it have been overwhelming and it feels too time consuming. And yeah, there's several different tools that I've tried, and I feel like I just am not being consistent and sticking to them.
Like name, name two or three systems that you've tried, whether it's an app or just paper, whatever it is. What have you tried?
So I have tried just like paper and pen, literally just writing out, these are our fixed expenses that are the same every month. Part of it probably is the monthly thing because I get paid usually once a month or sometimes twice a month and my husband gets paid every other week. If I'm trying to budget based on like monthly expenses, cuz of a lot of our expenses are monthly expenses, it's like, how do I divide this correctly between the paychecks? And I'm working backwards. I'm using this money to pay for stuff I paid for a long time ago, but I just made it and I don't know. That makes it confusing too. When you're using credit cards, we pay off our credit card every month, but those expenses were a month ago or a month and a half ago, and I'm paying for them now, so it's sort of confusing.
And so I've tried the paper and pen, like I said. I've also tried I think it's mint.com. I've tried the good budget, which is an app. And I don't remember the Dave Ramsey one- Every Dollar? Every Dollar. I tried that one too. So those are all similar, like different variations of the same thing.
Good budget of all of those ones that I've tried was my favorite. I feel like it was the most intuitive to me, but again, I just wasn't consistent with it. And I think, I feel like I have like, I don't know. I don't know if I have A D H D or what, but sometimes I feel like it's just like if a task is overwhelming to me, it's really hard for me to start it. I'm a procrastinator. And so that, that's part of the problem.
And then with your budget, I have the pay period budget academy, and that I haven't even started. So that it could be the, it's the perfect system for me and I just haven't started it. It's gonna take me forever to learn it. And it's never a good time. Oh, I'm getting ready for my son's birthday, or Oh, it's almost the holidays. And now, it's almost tax season, so maybe I should wait till after that. There's always something that I'm pushing off. It's learning a new thing is overwhelming and I'm just like afraid to start it.
So you've tried a lot of things basically. Okay, so first, let's think about, two components to this. There's one starting, like that's one thing is actually, jumping into something that's new, which is hard. And then there's the other side of it that's okay, once we picture at least the system being set up for you, what kind of things do we put in place so that you can stick with it, not just, have a great start to it, but then fall off the bandwagon later. We actually wanna Make sure it's simple enough, straightforward enough fits into your life enough that it doesn't just feel exciting at the beginning and then go away, but that we stay for the long haul.
So let's talk about starting. When something is new, it's very normal. So like you're not weird. There's nothing wrong with you. It's very normal to resist the idea of doing anything different than what we have been doing, right? It's that idea of inertia that we like to just stay an autopilot with whatever way we're going. And the idea of making a hard right or a hard left feels so overwhelming simply because it's new. And so doing something new does take more of our brain power than doing what we've always done. And sometimes, especially as moms with little kids, we're like, what brain power? Where does the extra come from? ? So that is, first of all, I just wanna acknowledge that's normal and I think healthy and fine.
So what we wanna do is ask ourselves, if it feels easier to just stay in autopilot with exactly where you are right now, the big question really for you to answer, and there is no right or wrong answer is there anything wrong with what you're doing right now? Are you experiencing results from what you're doing right now that align with what you wanna see with your money? Really the first question is, What are the things you're striving for when you're thinking about a budget? So when you are like, okay, I'm gonna give it a go, I'm gonna try another tool, what are the things that you are really hoping can change by using a budget?
I think there's several things. One of them is I do feel like I'm pretty frugal. Like, I love thrifting, so I go to a thrift store and I like buy five t-shirts for myself and I'm like, I really have enough t-shirts already. And even if it's $2 per t-shirt, that's still $10 and like that here and there can add up. So giving myself a little bit more structure around how much I really need to be spending on just random kind of purchases like that. But honestly, the, one of the biggest ones is investing. If we just knew where our money was going more, if we had a better sense of what our actual income looks like, because our income is also very variable. Both myself and my husband have variable income and so that makes it complicated too. Knowing like how much to put towards investment because I, I also bought the course from
Personal Finance Club?
Yes! Personal Finance Club. And I haven't gone through that either. So I'm just buying courses that I'm not doing, but I really want to invest. I know a little bit about it. I know the basics from following him and from the little bit you have posted about that as well. But I'd like to do that and really set ourselves up for the future cuz I know that we could be putting money towards that every month. I know that we have enough that we could be doing that.
Even if it's just a little bit one month, the next month we might have more. And just being able to have that little bit more wiggle room and know how much I really should be putting towards it. Because if we get like l, if we get a lot this month and I put a ton of money in investing, but then next month it's a leaner month and then I'm like oh no. Like I'm having to pull from my emergency fund to pay our bills because I gave too much to investing. So it's like I just never give any. And I know that's bad cuz like compound interest and like I should be starting sooner than later. And so, one of the biggest ones is investing.
And we do, we would like to buy a bigger house eventually. We haven't been in this house that long. This is our first house that we've bought, but it is small. And it's in a fine area, but the schools around us aren't like amazing. So, in the future, when our kids get older, we would love to potentially move another town over, which has better schools.
So, and it's much, it's a more expensive area. So in order to save up for that type of purchase, we're gonna have to find room in the budget to, have a good down payment and stuff.
Those are great goals. And I think having those, we have to remember that those are the reason that we're even trying to budget in the first place. Because if we're trying to budget for the sake of budgeting, it's gonna be like what you're experiencing, where it's there's not a clear win. There's not a clear positive or a clear upside. So it's this is annoying and takes my time and is complicated and frustrating. Why would I even try to do it? And so we just let it go, right? Because we're like that, that feels. When budgeting feels so much worse than not budgeting, we're gonna not budget. But if we can tie an tie, the idea of a budget to these things that you just mentioned where we're like, I currently don't invest as much as I want to, or I want to buy a house in that town five years from now, and I don't currently see a way that we can save the down payment we would need, then we start to see upsides to budgeting. Where we're like, oh, if I keep doing the exact same thing that I'm doing five years from now, I'm not gonna be able to buy that house and I'm not gonna have invested very much. But five years from now, if I stuck to a budget of some kind that gave me a plan for my money so that I was actually confident about where it was going, then five years from now, we could be buying a house in that town while also investing. It's not like a one and done of like today when we get off the call, you're like, yes, budgeting is the way to do this, and you never question it again.
It takes reminding ourselves all the time. that we don't budget for the sake of budgeting. It's the with spending less. Like people are constantly trying to just spend less than they currently are for the sake of spending less, and it's that's not a great goal. That's not gonna be a motivating goal for sure. But when we say I wanna spend less in this area so that I can spend a lot more in this area, then that's something that's really enticing. So having those two things that you mentioned clear and in front of you, things as silly quote unquote, as like renaming the title of your budget to be like the name of the town that you wanna move to and be like, the "get a house in X, Y, Z town budget." Something like that. So that it's more front and center, so we're like, this is why I'm doing this. It feels silly, or it feels overwhelming for the 15 minutes a week that I sit down and enter all my transactions, but this is the means by which I'm gonna get this big goal that we really want.
So that would be the first thing I would focus on is to remember your why. Remember why we're doing something, and that we don't budget for the sake of budgeting. Nobody's out there being like, as long as you have a budget, you get a prize. It's we budget so that these other things that wouldn't be possible without a plan can become possible when we do have a plan.
So that's the first part of starting. The second part, I would say, is that I think pay period. budgeting for many reasons, is a good idea because we get to look at shorter periods of time than a full month. So anytime someone is saying that they're overwhelmed or that they get behind on their transactions and so they're just like, screw it, I'll try again next month. Anytime that comes up, I really do. Push pay period. Budgeting maybe more than I would for someone else. Because when you're saying that your husband gets paid every other week, really all you need to be focusing on is these next two weeks. So whenever he gets paid, we just need to focus on, and I know you get paid as well. But we'll fit those in because they're once a month. We don't wanna budget by a part-time, once a month income. We want to follow the full-time income. So if you got in a rhythm of building a budget for his next six pay periods, that would be three months. And then you could be done building the budget for three months and you would just be in this tracking and adjusting mode, instead of having to get to the end of every month and be like, okay April starts next week, I gotta build a budget again. And feeling like you're constantly building another budget. If we set up six of his pay periods at one time, then you would be done building budgets for a quarter of the year and could instead be just adjusting and tracking what you're currently doing.
And what we do with this pay period budget method where we build six pay periods at one time, once we start tracking, we narrow in and put blinders on everything else other than our current pay period. So I think that would help to at least build a little momentum for you if, once you set up a few pay periods, if you say okay he gets paid on Friday and from this Friday until his next paycheck, the only thing I'm gonna worry about is these 14 days. And 14 days just naturally is less transactions, less income, less of a chance to get overwhelmed and mess it up than a full month is.
So it helps to have that rhythm of time built into your budget that is shorter than 30 days so that you don't have to feel like if you overspent at the thrift store on April 4th, that the next 26 days of your budget is completely a mess. If we mess it up in the first 10 days, we're like we might as well try again next month. But then what happens is we spend those last 20 days of the continuing to further mess it up.
Pay period budgeting doesn't avoid messing it up. I mess up my budget every single pay period. But what normally happens is that by the time we start to feel like things are a mess, we're usually about four or five days away from a new pay period. So it's a lot easier to be like, okay, I messed it up, but it's Tuesday and he gets paid Friday. And that's always a fresh start where we move to the next pay period and just leave behind whatever hot mess happened in the previous pay period. That's a lot easier for ourselves to be like, I can stick with a messy budget for four days and I know Friday is a fresh start.
So as I'm hearing you say some of those, overwhelmed, or it takes too long to get through the whole budget with tracking and everything, I do think that setting it up by pay period would give you the chance to just focus on a smaller chunk of time, so that you're not looking at the whole month feeling like I have to be really good and really on my A game for 30 days.
That's just hard to do in any task. And you mentioned too the timing of your paychecks being different all throughout the month, and that if you look at a monthly budget, like he's getting paid two Fridays, sometimes three, and then you have one or two part-time incomes. I consistently see people have the most transformation in their budget when they're biweekly, just like you are. So those are usually the people who have the biggest light bulb go off when they build a budget by pay period as opposed to by month, because exactly what you described earlier is happening all the time where it's like we have the same set of monthly bills every. But in a biweekly income, the bills that are grouped together into the first paycheck and then into the second paycheck is actually constantly changing, right? You don't have the same set of bills that always fall on pay period one, and these always fall on pay period two. Like for example, even something with like your mortgage. Sometimes your April mortgage is gonna fall in the second paycheck of the previous month, and sometimes it's gonna be in the first paycheck of the next month. These bills hop around all the time when you're biweekly.
The way that I have thought of budgeting in the past is like you set up your monthly budget and it's like you figure out how about how much you make every month, and you figure out about how much you spend every month and you reconcile those and you figure out how much you have left over and you put that towards whatever. And it's it's essentially the same every month. But I think what you're telling me is that with pay period budgeting, it's fresh every time. And you figure out, these are the bills that I have this time. This is how much money we're making, and you're not, it's not a set thing every time you're redoing it fresh each time.
I'm sure that gets faster as time goes on. But I guess I was thinking, not set it and forget it, but this is what it looks like every time and I'm just gonna keep doing that. And maybe the difference is gonna be different every month, but it's always gonna be the same. But what you're telling me is that's not how pay period budgeting is. Nope. Pay period budgeting, it's fresh every time. You're looking at what bills are coming up. And it's this is how much we made, this is how much we need to do on this. Like it's, yeah. Different every time.
Yeah. So what you actually do, like you said, that you really wanna invest. What happens when we budget by pay period is we say, I know that I have extra each month, but I don't know when or how much. And so when we build a pay period budget, we're basically on a mission to answer those two questions. Which pay period am I gonna have extra? But then how much is the extra gonna be and what happened? So many times, like it's really good to invest and set up auto pay, that's awesome. But what people will do is they'll look at an average, like a general 10,000 foot view of their finances and they'll say, okay, we can invest about $400 a month. And then they'll set up an auto pay for $400 a month on the 10th of the month, for example. Yeah. We can't always do that because each month actually looks different. So like you mentioned, holidays, birthdays, if you're going on a trip, like all of these things are changing what is and is not available in each individual pay period.
So when we set up a budget by pay period, it's a blend of a budget and a calendar. So at the very top of the pay period budget is the dates of all of your pay periods. And you're looking across asking yourself, what do I need to cover financially during these dates? So we fill in things like, who has a birthday across these six pay periods? Make sure I put in $40 for that. What trip do we have? What six month car insurance premium do I need to make sure is in here? And then once we fill all those things in, we can actually see on the date how much extra there's a row right under the dates of the pay period. The next row is amount left. So it will calculate for you, this is my income that I'll receive during this pay period, these are all the expenses that I need to cover during this pay period, and it'll tell you during this pay period, you have $242 left. So then we can know I can put this much money towards investing and it can happen during this pay period. And all of the income will be available. We're not planning on any future income. We're not averaging the month out. We're actually saying during these dates, these actual dollars are in our bank account. And then during these dates we need to cover these actual expenses. Whatever's left, I'm gonna put towards my goal.
And it's different every time, especially for weekly and biweekly. But really for everybody. Even if somebody has like a nice and clean once a month or twice a month, they still have these things like, okay, my kids' school registration is in this month and it's $200, so now our budget looks different than it did last month. So you're always gonna have things that make the pay periods look different.
And I think that was the problem that I was running into. Every month looking different in combination with the fact that, our income is so variable. So a month was extremely overwhelming. I feel like if I am grouping that out into smaller chunks of time, that would feel less overwhelming. Logically, that makes sense to me.
With variable income, we want to look back at the last three to six pay periods or paychecks and see what a range is, what's a reasonable range for income. Sometimes people have widely varying where they're like, sometimes I get $200, sometimes they get 2000. Some people have, just marginally variable where they're like, this is the set salary that I can always expect. But then if I work an overtime shift, then it'll be t his much higher. Once we do that, we wanna actually build the budget on the lower end of what we could expect for the income. So anytime we have to estimate something, we wanna aim low for income and aim high for expenses. Because the worst thing we can do for making a budget and then actually trying to stick to it is being overly optimistic about what we can expect to get. So for income that's variable, if you look back and you're like, okay, my husband's income is always between this $300 window, we wanna aim towards the lower side of that because it's so much easier to get paid more than you expected, than it is to get paid less than you expected.
Same with expenses. So like utilities are a big one that are variable. It's so much easier to budget for a certain amount and have the bill come back lower than you thought, than it is to have the bill come back higher than you thought. So, I'm a huge proponent of being realistic, not optimistic. It's just so much easier to be like, oh, we have an extra $45 this pay period than it is to be like, oh, we're $45 short. Now what do I need to adjust down?
Kind of make a budget on what you can reasonably expect to receive. Not like these higher amounts, but what you can reasonably anticipate getting. And then, if you built the budget that way and your paycheck comes back higher, you're like, Hey, we already built the budget with this lower amount and all of our bills are covered. This extra is available. It's freed up to do whatever we want it to do.
So mapping out by pay period according to his schedule, and then , looking at the dates of those pay periods and being like, where will my paycheck fall? And planning for it in that pay period can really help you get an accurate sense of exactly how many dollars you have when you have them, and how much of it is extra.
So that can simplify a lot of the frustrations that you've expressed at the beginning of I. The money is coming in and it's fine, and we're paying the credit card off in full, but at the same time, we're also not investing the way that we wanted to, and the tracking is overwhelming, having it laid out so that the budget itself is actually following the ebb and flow of your bank account can really reduce the overwhelm because things are starting to line up more simply so you don't have to keep it in your head.
Like So often, people who monthly budget when they're not paid monthly are writing a budget and all the numbers are accurate. That's one of the most frustrating parts is you're like, this is our actual income and these are actual expenses. Why does our bank account look nothing like what I wrote down? And it's because when we write down his biweekly income and your multiple part-time jobs, and we put that total at the top for our income, that's great, but that's what we're gonna receive by the end of the month. That's not what's available to us on day one. So flipping it around in a pay period budget can really, fundamentally change the way that your money feels.
(ADBREAKCANGOHERE) Today's conversation has already brought up some really practical ways to get control of your spending. And we'll talk about a few more before the episode is over. If you need more than the few tips we talk about here, and you really want to get your head around budgeting, I've condensed these lessons into a course called Pay Period Budget Academy.
Becoming a member today will give you instant access to lessons like getting a clear picture of your finances, setting up your pay period budget, planning for success with your money goals, and using that budget in real life. There's a lot more, you can unpack inside of Pay Period Budget Academy, and it's all designed to help you confidently take control of your home finances. You can become a member today by visiting debtfreemom.co/store.
Use the discount code PODCAST for 20% off. That's debtfreemom.co/store discount code PODCAST. And you can become a member with instant access to the entire course today.
When you pay your credit cards off, which you're saying like you do pay 'em off each month, but when you pay them off can also really simplify the amount of overwhelm or confusion or frustration that you feel. You know, we're paying them in full, but the income that we have right now is actually going to pay off past expenses. So if we get to April and you're like, okay, a new month, a new budget. But then at the same time as those new paychecks come in, they actually have to be used to pay off March's expenses. And it's this vicious cycle we get into where even though you're not accruing debt and you're not being charged interest, you're paying them in full, they're still not helping you maximize the potential of your current paychecks. So what we wanna do is get you ahead enough that you can start to follow your pay period budget, also following your credit card balance being paid down to zero. When we mimic a debit card, basically, where we say if he gets paid on Friday, we would say anything that is charged to the card between March 24th and April 6th, which is like the Thursday before he would get paid again, our card balance is gonna go up as we charge those things. But then at the end of the pay period, we're gonna pay it down to zero because our pay period budget is planning on us doing that. It's planning on having whatever income comes in at the beginning of the pay period, actually being used to pay off the expenses that we charged during that pay period.
So you're paying the credit card bill off, like as you spend it, as opposed to waiting until the credit card bill comes in the
mail type of thing?
Yes. Okay. I could not even, I have four credit cards and I use them all the time. I could not even tell you what the statement date is on them, because I pay them down to zero at the end of every pay period. So I get a statement and I have a due date, but it never really matters because the card is hitting zero twice a month. And so what that does is keep the exact same things where you still get all the credit card benefits, you get all the rewards, you get all the safety of using a credit card versus a debit card, but it adds to your financial picture this fresh start at every pay period.
So you don't need to have a, and I don't want you to have, this looming large once a month credit card balance that you have to pay next month. Because it gets you into this vicious cycle where you're trying to budget by pay period, but it like does it lines up almost, but it doesn't quite because you're like, this is great and my month looks good, but where is the money to also pay off last month?
So it takes a little bit of time to get ahead. It definitely does. For one month, you're basically gonna have to pay last month and the current month. That's like the only way to jumpstart yourself ahead so that you're not always a month behind. But you only have to do that once. And once, once we do that one time, then I think you will really feel a light bulb go off of feeling so much lighter in your finances. Cuz first of all, the credit card balance never gets as high as it used to simply because we're paying it off every other Friday. And then also you get to just look forward. You don't have to look backwards anymore. So you don't have to let. , anything that happened in March, carry into April. In order to pay it off. You get to just be like, okay, these are the expenses we had. Pay 'em down to zero, start a fresh start each pay period.
And when I first explained that, so many people were like, that's so complicated. But what it does is when we get a card that actually says zero at the end of every pay period, it's so much simpler because when your next pay period starts, you don't have anything else to worry about or think about or follow from your previous pay periods. You get to actually be like, I got a paycheck at the beginning of the pay period. I charged a bunch of expenses during the pay period, and then I paid them off at the end of the pay period, and now I start again. And that frees you from the once a month statement balance cycle.
That sounds simpler to me. I for sure understand what people are saying, but as you're explaining it, it does sound simpler to me because it's like you get the money that you're paid in that pay period. And the expenses that you have in that pay period is all that money is going towards. It's not going towards stuff that you're, you spent last month. And I feel like it's just, like you said, it gives you like a clean slate every time and I feel like that does seem a lot less overwhelming. Cause I'm like how do I, the math isn't mathing on this? Yes. Yeah. And monthly like this we're, this money is going towards what we spent last month and it's now what do I do? I certainly don't know how much to invest now cause I have a $500 credit card bill from last month with all our groceries and our gas. But that was last month's groceries and gas and I have this month. So it's, yeah, it's, it sounds much simpler to me.
So it really is. I mean, I think that by giving ourselves just that gift of not having to look back at our previous month while we're trying to budget our current month. That's just a layer of complication that we don't need. And that we really can accomplish all the same things by paying it off once a pay period. So, like I said, you get all your benefits, you get all your rewards. All the things that people are like, but I need this from my credit card. You can have all of that and still let go of the once a month statement cycle where it is like a debt. Even though you're not accruing interest on it or making minimum payments, it's still like a debt in the sense that your current paychecks have to pay off all this stuff that already happened, which keeps you from looking to the future. And we want, we wanna be able to just use the current paychecks to look to the future. So when you get a paycheck, you can know whatever I charge in the next two weeks is gonna be paid off in full by this paycheck. And I get to keep that go cycle going of moving forward instead of looking back.
And during that month where you're doing both if, the one month you said where you're like, you're gonna have to pay last month and this month, is that something where we could take whatever that amount is from savings. And like just pay off last month and then move forward with a clean slate now. And if we need to like, pay ourselves back slowly over time to like up our emergency fund or whatever, we can do that, but that way it's just done instead of trying to make our income this month fit last month and this month?
Yes, absolutely. So it, it depends for people what they're comfortable with and what they have in savings. But if you could do that and still have like at least one or two months worth of an emergency fund, even after you pulled out to, to pay off that credit card balance, then that really is the most simple way to go about it. Debbie, who was on podcast episode number one, talked about doing that so you could even listen to just a little bit of hers. She talked about when she first started pay period budgeting, she realized that she needed to get herself one month ahead, and she did go ahead and pull just enough to pay that one statement balance off. And she was like, that was like life changing for her because then you don't have to take a long time to get yourself a month ahead. You could do it all in kind of one fell swoop. Get yourself ahead.
And then what's so nice about that is you actually get to see a balance of actual zero on your card. Cuz so often, if you do the monthly cycle, you never get to actually see that because you pay the statement balance. But there's already new charges from this month and so the card never actually goes down truly to zero with that method. And if you pay it in full every pay period, you will actually see zero. Which I think is just mentally helpful too, of okay, it's all going away. It's not carrying over, it's not following us into next month. It is paying all the way down each time.
Also one thing you said, you mentioned like having the gift of being able to see a zero balance, which never happens. I also find, I don't know if all credit cards are like this, but specifically our credit card that is attached to our bank, and so I see it in our banking app and sometimes I'll look at it and I'm like, that number is huge. There's no way we spent that much last month. And so what happens is they'll send us a statement and it's say it's $500 or something. And then, like until we pay the statement off. It's also adding on any money that we're spending this month. And so if we've spent like $200 or $300, I'm seeing like $700, $800 and I'm like, we did not spend $800 on the credit. So I'm like, oh no, that's gonna come out. And that's a law that's a big chunk of this paycheck or whatever. And so, it's just, and that will alleviate that. So I'm just seeing what I'm paying, like what's actually on there right now and not what's about to be paid off plus next month's bill. So it gets confusing.
And it actually makes you realize that in the past you might have been putting things on the credit card because it's we will get paid by the time we actually have to pay off the statement. But when we switch ourselves into, I am spending what I currently have, and I'm not spending what I will have later down the road, then it helps us shift into focusing on those big goals like the house and the investing. Because we're like, okay, if I spend money that I haven't even been paid yet, I'm stealing from what I could have done in investments or in house down payment, or pay off debt, whatever your goal is. So it does help us be like, the money we have right now is the money that's available to spend, and if I'm gonna charge more than I'm actually able to pay right now, I'm stealing from my future pay periods. So that is a helpful boundary for us, right? To be like, stick with spending the money that you currently have. And then it helps us to be like, I could spend that. Maybe you look at your budget and you're like, okay, it doesn't fit in this pay period. But again, the new pay period starts in four days and I can add it to the next pay period and that's not that long to wait or whatever it is.
The last thing I want to talk about is tracking and the how do we actually make the rubber meet the road where the budget that we made is something that we actually follow through with. So you had mentioned getting a week behind in transactions. And that doesn't feel like a lot, but it actually is in terms of recording your spending and making sure you're staying on track. I, This is another one of those things that feels backward when I first say it, but hopefully when I explain it, it makes more sense of how it could be more simple.
I actually recommend tracking or updating the budget every two to three days, because the number of transactions that happens in that window of time is very small. And so what you allow yourself is a task that can fit into a free five to 10 minutes, instead of when you're overwhelmed, when someone is overwhelmed and we wait like a full week or a full two weeks to check in with our budget, it becomes something where we actually have to be like, okay, once the kids go to bed, I'm sitting down at the table and I'm opening my computer and I'm getting a notebook and I'm going through all these transactions. It becomes this giant task that's gonna take a an hour or more of our time. And when that's the case, we're just gonna be like, nah, I'm not doing that. And so we want to make it into a task that fits into a couple minutes because especially young moms who have little kids that aren't on consistent schedules, it is so much easier to find a random four to five minutes than it is to find one hour.
So if we have a task that we're like, oh, we just played at the park, I buckled my kids into their car seats and we turned music on, or I gave 'em a granola bar or whatever. I have four to five minutes sitting right here where everybody's buckled. They can't move and they're happy with a piece of food. I'm gonna open my budget app and go in and just record the last couple of transactions that happened in the last 48 hours. That becomes something that we can get into a rhythm of fitting into our life so much easier than these giant budget meetings that, like I said, just feel like such a drag on your time. Where if you wait until the kids go to bed to sit down and budget for an hour, it's like, but this one hour is my one hour to not have to, so it's like the last thing we wanna do is me staring at a spreadsheet. And so we're just not going to. Yes.
So when we check in with our budget, there's two things that happen. Number one, we just mark paid anything that is a regular bill. So we're opening our bank account and we're just looking yep, the cell phone bill came out, it got charged. That's the right amount. Our mortgage came out of the account. So we're checking in if the things that we planned to happen in the budget are actually happening. And then number two, we're recording new spending. So in the budget tracking process, there's always gonna be all the things we planned for and the things that we didn't plan for. And by didn't plan for there's a couple things that could happen. Number one, it could be actually unplanned spending but it's also just a budget category where like we budget for groceries and we say $400 for the pay period. We don't get one $400 charge like we do with a bill. We have seven different transactions at different stores. So that's the second piece of a budget check-in is that we write down our restaurant or grocery or gas, these categories where we budget a total amount, but it's spent in lots of little transactions- we record those. So at the bottom of the Debt Free Mom template, there are these budget trackers for these common categories where we set a full amount, but we're spending in lots of little ones along the way. So part of a budget check-in is then to just go down to the bottom and record those expenses into the category that they fall, and it will tell you how much is left in that category for your pay period.
So for example, if you set your grocery budget at $400 and then you go to Kroger and you spend $180, it's gonna tell you at the bottom, you have $220 left for this pay period. So you don't have to calculate it, you don't have to write it down as long as you enter Kroger $220 or whatever I said. It will tell you how much you have left.
So as far as those kind of expenses, I like to just get in a habit of opening the Google Sheets app on my phone and recording it right in the parking lot of the store f or groceries specifically because it is so much easier to then just be like, by the time I pull away from the store, I've bought all my groceries and I've jotted down how much it was.
That does not seem like an overwhelming task at all.
Good! And like I said, I mean, I'm bringing up sitting in the car often, but that is really, I mean, if I had to say the num, the top two places that I open and do anything in my budget, it's in bed or in my car. Those are the two things because I do almost all of it on my phone. And I'll just swipe between my bank app and the budget app and just make sure that's the easiest way for me to be like, okay, yep, there's the utility bill. Swipe over. Yep. It's the right amount. And I'll fill in the little sell to say, okay, it's paid.
And then I'll swipe back and look at any other transactions. So that's what I do. That's what the routine I've gotten into when I'm in the parking lot after I shop or whatever to write it down. And, as you have experienced in the past with feeling overwhelmed by the number of tasks in a week or in a two week period of time every time you can do that on your phone as you're leaving a store is just one less transaction that you have to pay attention to when it comes to an actual budget check-in.
So I like, I would venture, I guess if I looked at like the activity or the history on my budget, 99% of the activity is that it's open for 25 seconds where I like open it, I fill in the transaction and I close it and I move on. Very infrequently am I, like opening it and like staring and like doing a bunch of stuff. And so I, I have found, and think you would too, that once we get into something that feels so easy to record it, then it's okay, this isn't as big of a deal as this giant budget meeting. I can handle opening my phone, writing this down and just leaving it. Then you'll feel like, oh, I never even had to get to a point where I had to sit down and pull out my receipts and pull out all my bank account statements and have this giant list of untracked spending because I did it in small pieces along the way.
There's not a right or wrong to that at all. Some people are like, no, I have, every Saturday is my budget day and I sit down and I do all of it kind of thing. That's great. If that's a system that works, then that's great, but that's not the only way. If that hasn't worked for you, and if that has felt overwhelming, then try small little pieces throughout your week so that when you do sit down to actually check in with your budget, most of it is just confirming that what you thought would happen would actually happen, as opposed to you having to fill in everything from blank.
Yeah. Yep. That makes sense to me.
Good. Okay. So the big pieces that we've gone over are when you're having a hard time starting, remember the big picture of why you're actually trying to start in the first place. Because budgeting for the sake of budgeting is boring. And then, Number two, setting it up by pay period that can let you look at a long window of time overall, but only focus on one pay period at a time can help to narrow the amount of days that you have to feel like you need to be on it and sticking to it. And then number three, getting to a place where your credit card is ahead one month instead of behind, so that every pay period, you can pay it in full and see that zero balance and feel like you're continuing to focus forward instead of focus on previous expenses. And the math will math if you get it down to zero, each pay period. Yes, that's, that is, I love that phrase cuz that it comes up a lot like in budgeting, especially with credit cards, honestly, because the way the timing of the balances fall is just hard. So people are like, it should math, but it's not mathing. And I get it. It really doesn't it just doesn't math for some reason. And then lastly, getting into a tracking routine that fits into really small windows of time so that you never let it build up to a point that it feels overwhelming and feels like something that has to take over your time. And when we track, we have those two things that we're trying to do: mark paid what we already expected to have in the budget that we can just say, yes what I thought happened did happen, and then number two, recording any new spending that hasn't been put in the budget yet.
Bonus is that you are already a PBA student, and so all of this is in there, in, in fuller form, okay? So I, I think that. I have no offense that you bought it and didn't start at all. It's super normal. I can see, I don't look at it often, but I can see student activity, like how much they've done. Yes. And a lot of people, including myself, when you laughed at yourself for buying courses and then not doing 'em, I could probably name at least five courses that I've bought and then didn't even log in. So I'm guilty.
That makes me feel so much better. I am, I'm like, I have to be the only person who does this.
No, you're not. You're absolutely not. You're not. I'm as guilty of it as, as you said, that you are so, if this conversation hopefully helped be like, okay, maybe I can open some of those lessons and play them through. On purpose, I made no lesson longer than 15 minutes. So even though there's a lot in there if you have, again, just those small chunks of time where you're like, okay, I feel pretty on top of it about this, but this part of it is not clear to me, then there should be a lesson that's like less than 15 minutes to watch and you can even speed it up like a podcast. So hopefully those takeaways from this conversation combined with having all of the resources in there can help you to build a budget that follows your pay periods and feels like it is something that you can actually stick to.
And final thing, a successful budgeter is a persistent one and never a perfect one. Don't feel like you need to abandon it because it's not perfect or because it's not exactly what you wrote down is not happening in your bank account. Like none of us are experiencing a perfect pay period or a perfect month, and you don't have to feel like the tool isn't working or that you're doing something wrong simply because the numbers are changing. Everybody who budgets their numbers are changing. So persisting forward, even when it feels messy, even when your paycheck comes back and it's smaller than you thought it would persisting forward with that is the definition of a successful budgeter, because none of us can be perfect with it.
Okay. Yeah, that totally makes sense.
Awesome. Thank you for being willing to come on and for being willing to say things like, I opened it and then never did anything. Because I think there are so many people who do the same thing and they're gonna be like, oh I'm like Anna, I'm in the same boat.
Yes. Yes, for sure. Thank you so much. I really appreciate your time.
Yeah, sometimes people come on and talk about some specific aspect of their budget, but I think it's really helpful to also come on and be like, I want to budget, but what's square one?
Well, I hope that it's helpful for others too. Definitely was helpful for me.
It will be. Thank you Anna.
(Wrap Up) Do you find yourself overwhelmed? Like Anna was how many budget systems have you tried and walked away? Because it was just too much.
Just like Anna. I want to remind you that there are ways to simplify the process.
To find balance between being accurate and being flexible.
And make it so that the budget is something that helps you out. Not restricts you. So here are the three big takeaways I gave to Anna.
Number one know why you're budgeting. We don't budget for the sake of budgeting. We budget to help us accomplish a larger goal. So know what that goal is and keep it front and center in your budgeting.
Number two set up your budget in smaller chunks than a full month. If you're feeling constantly overwhelmed, don't try to stick to one plan for 30 days.
And number three, simplify your process by keeping your credit card paid off each pay period. What's charged during the pay period should also get paid off during the pay period.
Budgeting is a big task and it can feel overwhelming at the beginning, but with the right tools and the right mindset to be accurate and flexible, it doesn't have to stay that way.
(*Credits) Thanks for listening to the Debt Free Mom Podcast. If you want to join me as a guest on the show, go to dfmpodcast.com. The Debt Free Mom Podcast is hosted by me, Carly Hill, and is produced, edited, and mixed by Kyle Hill. Music for this episode was written by Kyle Hill. Hit subscribe wherever you're listening to join in with every new episode as we grow our confidence and contentment in our personal finances.
