Create a Fun Workable Budget

A budget need not be something that enslaves you or degrades your dreams. Obviously if you're living with children (who are unpredictable, at best, in terms of costs) in a low income, single parent family, you've got less options than a dual income married couple without children. But it's always possible to afford to live (near to) the way you'd like. It's via budgeting, planning and moderation.

What is a Budget?

A budget is:

• a method of planning for future and current income, to be offset by expenses;
• proactive;
• realistic, otherwise you'll never stick to it; and

• the result of assessing your spending habits, what can be adjusted and extraneous needs and dreams.

A budget isn't:

• a straitjacket, holding you to the decisions you've made months or even years ago;
• necessarily even strict or calculated to the penny; or
• something you can sketch out on a piece of paper and stick to your fridge with a magnet, never to be re-examined or stuck to.

Getting Started

Do you need a budget?

Can you get by without one? Sure. But wouldn't you like to be able to say (and prove) to the world and yourself that your goals have been recorded, you've got a game plan and you're making progress? If so, a budget is for you.

If you're savvy enough to maintain all of the plates spinning called parenthood, accounting, chef, housekeeper, employee (or employer!) and friend (you do have time for your friends, still, right?) - and to do it without lists and budgets and filing systems and post-its on various surfaces...kudos to you!

What are your goals?

Do you simply want to stay afloat? Pay off all of your credit card, government and personal debts? Plan for your childrens' educations? Move to a more upscale location, or even purchase a home? How about a car or a new wardrobe for yourself (I know you've been buying those kids clothes, but just how old is that tee-shirt you're wearing over your sweatpants?)? These are all things to keep in mind. Think of how much money and time you think it will take you until your goal is realized - at least for longer-term priorities.

How about a rainy-day fund; college fund(s); a new car; a gym membership; paying off consumer debt; to go back to school or upgrade training, in order to update your employability (maybe to get a higher paying job?); a vacation; a class or camp for your kids; something spectacular that the family can enjoy together, like an entertainment theatre for watching movies together; and anything else your heart dreams of.

What do you have to work with?

Think about all of your sources (and their amounts) of monthly and annual income. Keep in mind that the easiest and sometimes most rewarding thing, in the long-run, is to think only in terms of your net income, as taxes and other government contributions may be refunded back to you. This will be like free money - even though it's really an interest-free loan to the Government - and you'll be able to use it to either realize your dreams, sooner, or to enjoy and splurge in ways you wouldn't the rest of the year. You may even be ultra responsible with any refund and invest it into RRSPs or RESPs, two things that will insure your future is a little brighter and in the case of retirement savings, can even be a tax benefit for the next tax year.

What do you absolutely need to spend your income on?

To figure out just what you need to pay for, think of all of the sources of money disappearing that you deal with. Think about how much you regularly pay - you'll likely base your budget on that. Ideally, you'd need to spend only on the following:

• shelter;
• food;
• utilities;
• transportation to and from the place(s) providing that income;
• laundering and family hygiene;

• dentistry and medical insurance (and maybe life and disability insurances, as well, hmm?)

• and clothing.

You do nothave to spend your income: at Starbucks; on a car, it's fuel and insurance and parking; salon treatments, even though your stylist (masseuse?) is the best; on meals out; dry cleaning; on cigarettes, alcohol or recreational drugs; or on a long-distance plan if you rarely call anyone further away than an hour's ride.

Grab your calculator and some felt pens, because you're making a budget!

You've now got: goals, maybe with their target dates and costs; your take-home income for the individual months and year; and your monthly and annual expenses. You need some paper (or do what I do and use a spreadsheet program on your computer). The easiest thing to do? Have a separate sheet (or column) for each month and one for the year, too.

Don't worry, once you print out the final copy, you'll be allowed to colour.

1. First on our to do list is to plop in your incomes on the top of a page. Figure out the totals. Add this info to your yearly sheet.

2. Use the bottom of the sheet to list your usual requisite monthly expenses. Total these babies. Add these costs to the yearly sheet too, also including less frequent costs that aren't included in the monthly ones. Total those yearly puppies up, too.
3. Figure out the difference for both the monthly and yearly sheets. Income minus expenses. Don't worry just yet if some months you're in the red. As long as overall for the year, you're in the black, you can always offset or save money during those black-ink months to make up for the red-ink ones!

So now, you've got your bare minimum needs from your (net) income. How's it looking? Think you need a third job or considering robbing a convenience store?

Keep in mind this Jedi secret: It's not really that bleak when you take into account that costs will tend to equal out to whatever you feel that you've got to spend.

So last but not least, we come to those goals that started the whole brain embolism. Ask yourself when during the course of the year you'll have some wiggle room, and exactly how much wiggle can you manage? These are the opportunities to take. Especially when you're living on a strict budget, it's easy during those lax money months to go out and enjoy yourself, blow some of your wad of cash and then end up wondering what you did with all of that extra money as the next month arrives and you're strapped again.

Use these times to add in your goals to the monthly budget amounts, when you can afford them. If your monthly budget is roughly the same each month, you've got an easy task - just equalize the total that you'd like to invest in your goals over the course of the whole year.

However, most of us have some more expensive months than others. These can be dependant on weather (heating is more costly in the winter, obviously), work habits (you'll likely use more utilities when taking time off of work), the ages of our kids (back to school supplies and clothing can rack up more debt than Christmas! And don't even get me started on child care during the summer.) and annual medical and dental costs. Easy, too: you've got the yearly surplus right in front of you - just note which months you have more of that surplus to use, and pencil in the amounts you'll save for the future expense.

Keep in mind that the goals you've listed: those are enjoying yourself, just in the long run. But buy yourself a fancy coffee, too!

The last step...

Make this budget attractive to you. Would you want to pray and talk dirty to a drab looking sheet of paper? No, I think it completely necessary to make it look fabulous. This is where the good old word processing applications come in handy. Add some borders, clip art (I particularly enjoy webdings as bullets), and funny quotes or jokes about saving money. Or money being the death of you. Or something pithy enough to make you smile, long enough to review your gorgeous budget.

When they're looking sexy, throw them into a binder. Heck, make the binder sexy, too!

My favourite place to stick up a budget (or two, because you should have the current and next month's there, telling you what's what) is the good old fridge. I mean, you get to play with magnets, you probably pass by it 934 times a day and when you're reaching for that pint of haagen daas, it will remind you to stretch it out - it's not cheap bites of heaven you're eating, after all!

Enjoy your ice cream while reveling in the thought of where you'll be a year from now. By then, you might be able to eat 2 pints!