Four: Track progress with a budget

Discussion
1

Why budget?

Think of budgeting as setting micro goals across all your spending. It helps anchor you as you work to make progress with changing your spending or even just understanding where your money is going. :anchor: Even if you earn more than you need to cover all your monthly expenses, budgeting can help you gain more clarity around where your money is going and decide if it’s going where you really want it to go.

Advice on setting targets

For non-fixed expenses, it can be challenging to know whether or not a specific amount for any category is the “right” amount for you. There isn’t a one size fits all method to budgeting and it should be based on your goals and financial situation.

You can ask yourself, if I spend $x on clothes and gear in a month will I be able to cover all my obligations and put money toward longer term goals I’ve set at the start of this challenge?

If you know your overspending and you want to reel it in, you could review your actuals and then set a target to keep all discretionary categories X% below your spending actuals.

Focus on setting the best targets you can now with the knowledge you have. Your income, spending, goals, and priorities will change over time and you can always adjust your budget accordingly in the future.

The simplest method if you’re really stuck is to look at your actuals from last month and use those as a baseline for this month. Just input those actual amounts for each category into the categories sheet in column E, along with your expected after-tax income amount, and see whether that is working for you or not.

Hint: if your Planned Cash Flow in the upper left of the Monthly Budget sheet is negative, it’s probably not working for you and you need to cut back in some categories. The exception to this is if you have a lumpy income and expect next month to cover the overage, but it’s still a better idea to plan to spend up to or less than what you expect to earn this month.

We’ll talk more on cash flow in the next segment.

If you prefer to use a methodology, 50/30/20 budgeting is a popular option and this blog post has a quick and easy calculator to help you come up with some targets.

Your biggest win

Now that you’ve decided on some initial targets, which category would be the biggest win for you if you can stay under or right on budget?

You can reference your actionable goals from segment three to help you decide or base it purely on the one you overspent the most last month that wasn’t an obligated or fixed expense.

It could also be the category that is least in line with your values or gives you the most anxiety to see those transactions come through.

Examples

If I can stay under in the gear & clothing group this month that would be my biggest win because I’ve had too many trips to REI recently.

Staying under in my takeout category would be my biggest win. I really want to use up some of the food stockpiled in the pantry.

Staying under in the utilities category would be a huge win for us this month. I really want us to conserve more energy, not just for our wallet, but for the planet too.

I spend so much money on gas. Staying under in this category would be a big win. I’ll try to start walking more or riding my bike and driving less.

Your turn to share!

What is your biggest budgeting category win if you can stay at or under budget this month? Click “reply” below to share.

Feel free to also share how you came up with your budget targets. Did you use a methodology, start with your actuals, or use a goal based approach to reduce spending?

Resources & Support

Resources

Here are a few guides you may find useful as you work through the checklist for this segment:

Getting support

If you need help with completing any of the checklist items, including addressing account connection issues and errors, please reach out to our support team via the chat tool in the lower right corner of the Console at https://sheets.tillerhq.com/auth/google for the fastest response. The topics here are intended to be motivational, not for troubleshooting and the team via Chat can help you faster and more effectively than anyone here in the community.

2

Food is our biggest potential win category!

3

Baking was my coping mechanism over the holidays. I ended up overspending on groceries by a lot and made 6 very tasty desserts… for 2(ish) people. We’re working on eating through our pantry this month to address.

4

I agree with the other posts I’ve seen so far. Groceries and dining/alcohol are the areas where we can have our biggest wins. We don’t have a lot of flexibility with utilities/bills or auto/gas expenses, and now that the holidays are behind us, I don’t foresee a lot of miscellaneous spending… but food (and alcohol) is an area where we can be smart about our spending with noticeable gains.

5

My biggest win category would be clothes / gear. I’m still dialing in my own gear for backpacking and adventures, and it’s so tempting to shop REI online / outlet deals…

For any gear / adventure spending this month I will also choose the local consignment gear shop. :recycle:

6

Cutting down on dining out would our biggest win. Though it is a tough one!

7

Agree with most everyone here. Groceries and dining out are our primary soft spots.

My husband and I are both trying to lose weight this year so we’ve become more mindful about our eating.

That’s translated into a few small wins. Fewer processed foods make their way into the shopping cart. We’re looking for free or low cost family entertainment options. For us, that means more hiking and biking which helps us meet two goals.

8

Groceries is the category that I focus on the most and try the hardest to hit my goal, which I chose based on talking with other families and as a “reasonable” percentage of my income. I also feel it is the category I have the most control over, but is also the most challenging living in a rural area with few buying option. I rarely can keep within this budget though and it can feel like a failure. :slightly_frowning_face:

9

I wouldn’t beat yourself up @Janelle. The pandemic has our grocery bill shooting through the roof but it’s offset with a huge reduction in takeout and gas.

Forgive me for the super basic suggestions but have you tried reducing meat in your family’s diet? We noticed our meat consumption was driving the bulk of grocery increases. We went for cheaper cuts of meat and introduced meatless meals a couple of times per week.

We also cut back on prepared and processed foods. For example, individually packaged chips and stuff. We invested in a mandoline and make chips at home now.

It’s helped control our salt intake as well.

Good luck to you!

10

Thanks for the thoughtful suggestions @ty18881, I appreciate it!

Cutting down on meat is a great suggestion, and I bet I could swap out another 1-2 dinners a week. I do rely A LOT on healthy-ish packaged snacks for my kids, but even buying them at discount stores adds up quickly, so that’s my new challenge! I love the idea of a mandolin slicer to make raw veggies more fun and I think an easy popcorn maker could save a bunch over buying pre-popped bags. I wonder what else? Thanks!