Rooted Mama Podcast
Episode 44: Budgeting for Beginners
Hello friends! Welcome to another episode of the Rooted Mama Podcast. Today we’re going to do an episode all about money. Now let’s get into it!
I think money is an important topic to address because for a lot of people it really is a source of a lot of anxiety and stress and so having a basic understanding of how to deal with it and kind of addressing some of the emotional aspects that are tied to it I feel like will be really helpful for a lot of people.
So I want us to start with some really practical skills. In this episode I want to talk about budgeting, I want to talk about communication, and I also want to talk about like as a woman and as a mom just the impacts you can have on your household if you learn how to manage your money well and communicate well when it comes to money.
I think as women we have a huge opportunity to be a blessing to our husbands and our families especially if we’re willing to put in the work to learn how to manage our money well. Obviously when you’re married the ideal I believe is to be in a partnership where the finances are joined into one. If that’s not the case for you I still think a lot of these tips in this episode would be really helpful and really applicable because learning how to handle money and then communicate well with money and about money I would say are two separate skills but both have significant implications for your stress level and just overall how you’re healthy and how you’re going to manage your money.
If you learn how to manage your money well you really can be a blessing to so many people and I think the reason money is such a hard topic to deal with is because it’s not just addressing money. It in essence it really is an indicator of how much self-control you have as well because if you can learn how to manage your money well you’re really managing yourself well and your own behaviors.
So let’s dive into practically how to sit down and do a budget. This might sound really simple but most people don’t do a budget. Most people live paycheck to paycheck and have no idea how much money is coming in how much money is going out and they kind of are just reacting to things that pop up in their life instead of being intentional with their money and so a lot of these things are really really simple but if you do them and do them consistently I promise you they will have a profound impact on your life.
So the first step is to sit down and track everything. And I literally mean everything. So I don’t know if you’re a pen and paper person like me, get out a piece of paper, get out all your bills, budgets, checking account, like get out everything you need and just start writing down information. Because in this stage in the game you really need to just collect information on how much money you have coming in and how much money you have going out.
And so I would start by writing your income at the top and if you have a fixed income this will be easy. If your income fluctuates this can get a little trickier but either way you need to put how much income you have coming in consistently and then you need to start tracking expenses.
And I would kind of divide this into two categories. You’ll have expenses that don’t really change and then you’ll have expenses that fluctuate depending on what’s going on. So groceries are generally going to fluctuate, gas might fluctuate, activities might fluctuate, all that’s going to be kind of up and down depending on what you have going on that month. But there’s going to be other bills that your mortgage or your rent payment that will be consistent.
So you’re going to have to start looking at how much money you have coming in and then you’re going to have to start looking at how much will probably be consistent month to month. Other bills could go either way. You might have a water bill that fluctuates month to month or you might have an electricity bill that also goes up and down. But things like insurance, taxes, things like that, those bills month to month will probably be consistently the same. So once you have that all written down and you have it kind of categorized into fixed and fluctuating budgets, you may find that you need to go back a couple months to kind of get a trend of okay this is about how much we’re spending. So you might want to start looking at how you’re spending in these categories.
For us we know that seasonally our electricity bill is going to go up typically summer, early fall, and then typically it goes back down and then our propane usage will go up in the winter as well depending on how cold it is outside. You also might find that some bills are monthly whereas other bills are annual as well. And you may look and see for certain bills is it cheaper or do we get a discount if we pay it once a year or is it the same price as if we just divide it up and pay it every month.
You also want to evaluate how much do you have in savings? How much debt do you have? How many assets do you have? And you want to have this all written down in one sheet of paper so you can look at the whole thing and really get a picture of kind of the state of your financial house so to speak.
Step two is you want to actually make a budget and there’s lots of different tools you can use for this. I would highly recommend the EveryDollar app. 1, its free and 2, it actually gives you a suggested budget that makes it easier to put things into and track things and fill things out. There’s lots of other free apps out there. If you’re handy with Excel, you can use an Excel spreadsheet. Whatever it is, you need to find a system that kind of intuitively works for you. And ideally, if you’re doing a budget for the first time, you want to do this in collaboration with your partner because if you’re going to have a budget that says this is where we’re going to spend our money and this is how we’re going to spend our money. You really want to make sure that your partner is on board with that and you’re both on the same page of what this is going to look like and what are the clear expectations that we have for all parties involved.
If you notice at this stage that you’re having a lot of resistance to doing a budget, that’s normal. No one really likes to do a budget, but I promise you if you’ll commit and follow through with this, it really will give you a lot of freedom and a lot of peace of mind because you’ll know where the budget is. You’ll know where all the money is going and what your finances look like. A lot of times the avoidance method where it’s out of sight, out of mind, I don’t really think about it, I don’t really talk about it, that can really cause stress because then when something happens, everyone’s in crisis mode and no one really has a plan for how to manage it.
So sit down with your partner, talk to them about it, make sure everyone knows why you want to do a budget and kind of your goals. Maybe the goal is I want to get on the same page as my spouse. I want to make sure that we know how to manage money. I want to save for the future. Whatever your goals are, I would actually write down your goals because we’re about to get into kind of the challenging part of this whole process and so if you’re really clear on this is what I want to accomplish by doing this budget, it will make it much easier for you to push through and actually be successful with it. You also want to talk to your partner and get a sense of kind of your relationship with money.
Typically you’ll have one partner who’s more controlling and wants to kind of nitpick things and be OCD about it. And then you’ll have one partner who’s more avoidant and doesn’t necessarily want to deal with it. So work to identify whether or not you tend to be more controlling or more avoidant and more anxious about it. And then talk to each other about how you can support one another in working on communicating and communicating well.
I think it’s really important to understand one, just expectations going into the conversation. You really don’t want to be in a space where you’re blaming your partner. But I do think if both parties are willing to take personal responsibility for how they contributed to the state of the finances, I think that’s a really good place to start because especially if your income is shared and your finances are put together, it really takes two people to make a mess. And so it’s going to take two people to clean up that mess.
I also think it’s important to practically figure out who’s going to do which roles when it comes to the budget. My husband and I have kind of done it both ways. Initially, I started making the budget for our family and it was helpful for me because it really allowed me to get a sense of where our money was going and be really clear on like our financial goals. But I found over time, it actually works a lot better if my husband does more of the logistics when it comes to our money, because he tends to be more passive with things. And so him being more involved allows him to kind of like take the lead in that role. And me not being in control of it actually helps me lean into having to collaborate with him more and communicate with him more instead of me just taking over and doing it all myself. So for our relationship, that’s worked really well. So make sure you have that discussion with your partner of who practically is going to do the actual logistics of putting together the budget and tracking things. I also recommend setting a regular time to meet and go over the budget. I’ve found that typically at least twice a month is helpful. 1. to make a budget for upcoming months. 2. meeting to reconcile the budget and kind of go over and go, okay, did we have extra money? Great.
This is what we’re going to do with the extra money. Oh, did we overspend this month? Okay. How are we going to course correct and make sure that it doesn’t happen again? So those frequent check-ins are really helpful and also tracking that happens throughout the month as well, kind of which person’s in charge of that.
Derek does the budget for the month and does the practical, like making sure we have money and all the right accounts and everything’s kind of laid out as it needs to be. I still track groceries and my own personal spending because I really found that if I don’t keep track of it, it’s really easy to overspend. And so for me personally, I still track how much I’m spending on groceries and food and things like that because in our family, I do the bulk of the grocery shopping and kind of buying things for the household. And so me tracking those amounts on how much I’m spending is really helpful because if I didn’t track those things, it would make it really hard for me to remain accountable to how I’m doing with my money. Okay. So when you sit down to make your budget together, you want to start by writing your income at the top. And if you have fluctuating income, you would want to lean more on the conservative side of like, okay, typically this is how much we make. If we have a really good month, maybe it’s this much more higher, but we can know we can pretty predictably plan on having X amount every month for different expenses.
And so once you have that income at the top, then you start to write out all your expenses in order of priority, food, housing, shelter, transportation, all of those are going to be more important than debt and other bills. Don’t let credit card collectors bully you into paying off a credit card bill before you’ve paid the light bill and fed your kids for the month.
So once you list it in order of priority, then you can actually start using the budget for the month. And if you find that, Ooh, we have more. Expenses than we do income, then maybe it’s a discussion of, can I pick up extra hours at work? Is there a part-time job I can get? What are ways I can cut down on some of our spending so that we can make sure this budget is reconciled. And literally we’re telling every single dollar where to go before the month begins.
It’s really important to have an emergency fund because things pop up. If you have a lot of debt and you don’t have any savings, I’d recommend starting with a thousand dollar emergency fund. I found that Dave Ramsey’s baby steps is a really, is a really practical way to start when it comes to making a budget. So he says that start with a thousand dollar emergency fund, and then you can work on systematically paying off your debts.
A lot of debt, honestly, just comes from not paying attention. It’s really easy when you use credit cards or debt as a tool to overspend. And they’ve actually done studies that show if you use a card instead of cash, when you buy something that you actually spend more money because you don’t have to experience the physical pain of letting go of that cash. And so we use cards for things. And I think that’s where the reconciliation piece comes into it, because if I’m not keeping myself accountable to track how much I’m spending, it’s really easy to overdo it. And so frequently checking in with how much I’m spending and kind of, I have an overall grocery budget for the month, but then I typically try to break it down into, okay, in a week, how much do I legitimately want to spend on groceries? And that kind of fluctuates month to month because we typically will buy like a quarter to a half of a cow, probably about once a quarter.
And so depending on how much meat we already have in our freezer, that will influence the grocery budget quite a bit. So we have a grocery budget and then I have a separate meat fund budget as well, because we have six kids. And when you have that many kids, it’s really easy to overspend on groceries. So you’ve done it. You wrote out your budget. Everything’s reconciled. You have a plan. You’ve talked about your goals with your partner.
Avoiding Implementation Frustration
Now it’s time to actually start implementing what you did. The first month, I want you to check in frequently because the budget is going to get messed up. That is okay. It takes really two to three months for you to finally start to get the hang of it because things are going to come up that you honestly didn’t think about and didn’t predict.
And so having that wiggle room to know like, okay, I’m learning. This is not going to be perfect, but that’s okay. You will get better at it over time and being able to predict like, oh, Christmas is at the same time every year. We need to plan for that. That will get much easier the more you get the hang of things and stay on top of your budget. So step three is to refine your budget. Every month you need to make a new budget.
It’s fine if you use the old, the previous month’s budget as a template, but you really have to intentionally make a new budget every month because you need to sit down and go, okay, what’s going on this month? What expenses do we have? Are we traveling? Do we have extra activities? Are the kids doing basketball? What is going on this month and what money do we need to accommodate those things? Step four, set your financial goals. I talked about this at the beginning, but I really think it’s worth repeating because if you write down your goal and your goal is what we call a smart goal, it’s specific, measurable, achievable, relevant, and time bound. All of those things are important. When you make a goal. And so sit down with your partner and write down your financial goals and put them in a place you both can see them because you really, when, when you’re like, I really want to go out to eat, or I really want the extra thing, or I really want to do this extra activity. You need to have the motivation in front of you to recognize, oh, this is what I need to work on. And this is why.
And step five is be aware of your habits and your temperament. If you really struggle with money, there could be multiple reasons why that is. And so. If you’re willing to talk to your partner and be willing to take responsibility for kind of your own temperament and your habits, some people are more inclined to be savers, whereas other people are more inclined to be spenders. And a lot of people get anxious about money and then other people might get obsessive about money or controlling with money. And so regardless of what your tendency is or your habit is, you want to make sure that you’re taking accountability for your part in things and communicating with your partner. So you can have a healthy relationship. And you can work on things.
I’m going to write all of these activities out into a worksheet that you can download on my website, shelbyleppin.com and use it as a resource to help you as you work towards your financial goals. I hope that you found this information to be helpful. More additional resources and support will be available in the show notes. And I’ll talk to you guys in the next episode.
Show Notes: