Any entity managing a budget does so in an annual format, with the notable exception of our homes. Homemakers tasked with the responsibility of budgeting for their homes are usually only shown a monthly system. It may seem daunting and time consuming to multiply that into a year (and it will be time consuming). But it’s the only reasonable way to stick to a budget when you aren’t making an abundance more than your expenses. The best time to be a good steward of your money is when you have little of it.
-The best time to be a good steward of your money is when you have little of it.
It’s indeed a bit overwhelming when you’re struggling just figuring out a monthly budget. But let me ask you how many times a monthly budget worked for you? You may have even had a monthly budget that funded a savings account for emergencies or a Christmas piggy bank. But how do you plan for things like medical expenses that only happen once or twice a year? There’s vet bills, home maintenance savings, auto maintenance expenses, vacation/ trip money, clothing expenses, tax bills (or refunds), miscellaneous birthday gifts for classmates, that 4th of July bash you’re known for, annual landscape mulching? By looking at your expenses as an annual event you actually CAN anticipate these things that might otherwise blow your monthly budget.
By looking at your expenses as an annual event you actually CAN anticipate these things that might otherwise blow your monthly budget.
You can also view the seasonal changes if your wages vary by them. Being born, raised and currently back in FL means I know the economy was always dictated by the ebbs and flows of tourists and snowbirds. Or a myriad of other reasons your income fluctuates. What happens when you don’t think of hurricane season during snowbird season? You hurt! That’s what. You fail your budget, again. You curse the skies and hide in your house July and August while daydreaming about moving to the PNW. Or at least that’s my coping ritual. The point is without accomadating moving incomes and expenses throughout your year you’ll never end up ahead.
…without accomadating moving incomes and expenses throughout your year you’ll never end up ahead.
I use the month of October as it’s the traditional end of the fiscal year. But also because our November and December holds no less than 2 household birthday, 2 extended family birthdays and our wedding anniversary on top of my two favorite holidays of the year. Bookended by Halloween and New years. So taking the month leading up to that seems the best way of accomplishing such a large task. Take as many pockets of time as you need.
However, you can utilize the same method at any point in the year. You would just want to set a deadline to be day one. Then use your calculations for how many months and weeks and paychecks you have left till the next year can begin.
Do this in several sittings so you don’t get overwhelmed. It also allows space and time to reevaluate and remember things that didn’t come to mind the first time. You’ll need either a spreadsheet or good ol’ fashioned paper and pencil to continue. Along with an afternoon or the like to work out expenses first.
Take me to Task #1
