The 1 Month Budget

As someone who does not have ADHD, I love to plan. There have been times in my life, where I have prepared and tried to stick to budgets that have been for a year or longer. Honestly I think my budget plan was pretty sound, and logically there should have been no reason why I could not stick to it.

What I did not take into account was the physical, emotional, and mental barriers that we encounter every day. My budget did not take into account that things broke, and had to be repaired or replaced. I did not take into account times when I just wanted to do something, or get something. I did not deal well when I was unable to stick to my budget, and therefore gave myself permission to continue to make bad financial decisions because I had already blown my plan for the year.

I still continue to do longer term financial planning when it comes to certain financial goals. My current budget however is for just a month. I know there are a lot of people reading this, that just shiver when I mention the term budget, however having a one month budget is simple enough to prepare, and is an important tool to help you prioritize your spending. If you prepare your budget on a spread sheet, it is something that should only take a couple of minutes each month to update. The most important aspect of the one month budget for me is that it forces me to focus on the present. It is harder for me to push off paying down a loan, or putting less money in my savings, because I can't put if off on my budget. It is important for allof us to keep the majority of our financial focus on the present, it is where all of the action takes place that will help shape our financial future.

Comments

[Jean]

I could never wrap my brain around a one-month budget--for me, that was too long. With my bi-monthly pay schedule, the whole budget thing finally clicked when I started budgeting for each pay period instead of for the month.

Now I'm thinking about trying out a weekly budget. I think that will probably work best if I end up losing my job at the end of the month, as my employer has warned is a possibility. I also think maybe it will be easier for both my husband and I to stick to if we trick ourselves into thinking it's only for one week at a time.

[Rob]

My budget term is a month in length. To have the most efficient (and buffered) budget possible, I use the following formula.

(Expected Monthly Expenses) x 1.3

The extra 30% buffer allows room for "the physical, emotional, and mental barriers that we encounter every day", and the best part is that if at the end of the month you still have the 30%, you can split it in half: add 15% to your savings, and 15% to next month's budget buffer.

This helps with those bigger expenses (car issues, immediate repairs, unforeseen costs, spontaneous opportunistic experiences) without tappign into your savings (the money left over after budget).

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[Wise Finish]

Howe does a monthly budget work when you have things you need to save for over the long-term like insurance premiums & a new car?

[John MacKenzie]

Wise Finish

There is a little extra planning when dealing with long term savings. For that I figure out what I need to save for a certain goal and divide it by the number of months I want to hit my goal by. If I pay an annual insurance premium of $600.00 the I divide the $600 by 12 and budget $50 in my monthly budget.