Just hearing the word “budget” probably gets your financial wheels spinning. You may even have a strong emotional reaction – a love or a hate – associated with the word “budget.”
Do you ever think of things besides money when you think of budgeting?
Any time we have a resource that is limited, we consciously or unconsciously decide whether we will budget it or not. Maybe instead of the verb “budget” you use a word like ration or allocate. It could be as simple as the thought “I want this candy to last until Easter, so I better not eat it all today.” Or more complex, like scheduling out every minute of a busy day.
Today is an exciting day for us– we are having a new internet service installed. For the past two years, our internet bandwidth has been quite limited. There aren’t many options when you live in the boonies, so we were paying $60/month for 10 GB of data. Between my Etsy business and my growing blog, it was really hard to manage with so little data. In August we decided to pay an additional $30 per month (out of my blogging income) to bump our data allowance up to 20 GB per month. Even so, we never stream any video or make any big downloads. The 20 GB just barely covers basic use necessary for the blog.
Budgeting our limited internet bandwidth has brought out some important lessons that apply to budgeting money.
1- Budgeting often starts with a rude awakening
When we first started with our limited internet plan two years ago, we were so excited about the speed. Our previous satelite-based internet was not fast enough to stream video or Skype with family. Now that our service could accommodate such activities, we took advantage of it and enjoyed connecting with family through video chats. Then we got our first bill and it was more than double what we expected. Not having to pay attention to data usage before, we had a rude awakening.
The need to start budgeting your money often comes as a rude awakening. Maybe you’ve got collection agencies calling or you’ve been denied a mortgage for a house your want to buy. Maybe you calculated the daily interest you’re paying on your student loans and you realize it’s time to take action. Your first month of tracking your spending might reveal that you spend a whole lot more on eating out than you ever imagined.
Anticipate some eye-opening moments as you start to budget. Knowing that there will be some rude awakenings will help you accept them and move on. Giving up on budgeting because there’s a steeper learning curve than you expected won’t help you make progress toward your financial goals.
2- Some things just have to go
After our rude awakening, we learned that we could not Skype or watch videos over our internet connection. It simply used too much bandwidth. We quickly cut those from our use. I changed my settings on Facebook so that videos wouldn’t automatically start playing. We told friends and family that we wouldn’t be able to Skype with them after all. It was pretty disappointing that the perks we were excited about with a faster internet connection were no longer available, but we knew we could make it do. I watched the videos for Elite Blog Academy from somewhere that had free wireless, like the library. When there was something big I needed to download, I would have my husband download it for me at work.
When you start budgeting, you’ll want to cut something quick. Find an expense that’s a luxury that you could do without, but would bring a significant savings. Without thinking too hard, decide to cut it out of your budget either permanently or for a designated period of time. Having a big “win” in the beginning will not only increase the cash flow in your budget, but it will give you the momentum to keep going.
3- Prioritize
Knowing our bandwidth was limited forced me to prioritize my internet activities. I stopped surfing Pinterest for fun. I rarely got on my personal Facebook account. In January I was extra careful to prioritize. Posting daily Monday through Friday for the Frugal Fresh Start Challenge was my priority, as it was the best use of our bandwidth. Posting five times a week meant I needed to download and upload more images for blog posts. I also had to do more research, writing, and promoting for my posts.
Budgeting money comes down to priorities, which is why budgeting feels so personal. It just makes sense that when a resource (like money) is limited, we want to spend it on things that matter most to us. The key is to recognize and outline your priorities (in other words, make a budget) before you go spending your money on whatever crosses your path. Prioritizing our spending makes perfect sense; we just need to do it.
4- Plan ahead
Since we don’t know exactly what’s coming up, we try to be extra conservative with our bandwidth in the beginning of the month. When I know I’m going to be somewhere that has a free wi-fi connection, I will save any data-intensive activities or downloads for that occasion.
Not knowing what the rest of the month will bring, we try to avoid spending our entire grocery budget during the first week of the month. In fact, we aim to be more lean at the beginning of the month so we have more breathing room at the end of the month. It’s a much better feeling to have more money than month left, than to have more month than money.
5- Check in frequently
In order to avoid another rude awakening, we check our bandwidth usage frequently. When we sign onto our service provider’s site, we can see how much bandwidth we have used so far. They also provide a visual that compares the percentage of our bandwidth used with the percentage of the billing period elapsed. They (usually) send us out a notice when we reach 50%, 75% and 90%of our allowance, but it’s important for us to take the initiative and check in more frequently.
A successful budget also needs frequent attention. You’ll need to regularly record your spending, check your budget category balances, and maintain necessary budget flexibility. Staying on top of your budget on a day-to-day basis will make your monthly budget planning meetings go smoothly. By checking in frequently, you’ll avoid those financial rude awakenings.
If all goes well with today’s installation, we will be canceling our other internet service and going with the new provider who may not be quite as fast, but has unlimited bandwidth. Hopefully from here on out we will be able to spend more of our energy budgeting our money and less energy budgeting our internet use. Though I realize it’s a first world problem, not having to budget bandwidth is going to relieve stress that has brought me to tears on more than one occasion.
How about you?
- Have you intensely budgeted any resources other than money (i.e. time, food, etc)?
- What lessons about budgeting money did you learn?
- Does anyone else out there have to budget their bandwidth for their home internet?
Linked to One Project at a Time
By the way, I really appreciated your Frugal Fresh Start Challenge in January. I’m glad you were able to find a way to post it!
What a great comparison! I like the idea of budgeting other resources in my life. Lately I’ve been thinking about my time as a resource to budget. I only have so much, so I need to prioritize and plan ahead so that I can use it effectively. Thanks for a thought-provoking post!
I’m so sorry you have limited Internet bandwidth! That would cause me to move. (Yes, we only buy houses that have FIOS connections – it’s a deal breaker for us we use so much Internet). I can deal with slow speeds (I did grow up on 300baud modems!), but limited bandwidth would be the end of me. We are constantly online, and not just for videos and things – we read the news, catch up on blogs, catch up with friends – and more importantly, hubby works from home, over the Internet (It also lets me work from home occasionally). We do have to monitor our bandwidth on our cell phones, but we only get away with the 1GB plan because we have the home Internet connection.
There are various rumblings about Comcast/Verizon switching to a “capped plan” as well, and I think there will be riots in the street when/if that happens!
I am just started to budget last year. I realized with horror how much we spend in food. I means just groceries… We are a family of 4 , and our bill is over 1350 or 1280 for month… My friend spend 600.00.. I never make a budget, just buy groceries or somethingthat i want to cook. Unbelieave. Since a few months ago I started to check my prices and tried to stick a list, but iam not sucesfully at all. My spending is less but still over 1000.00. We love yogurt, fruit and dessert and fish ,. that is a lot of bulb of money there. I hope to cook more and save some money to pay some debt. Thank You for your ideas.
This is a really good analogy! Budgeting my time has been more crucial this year than ever. The time after I get home from work until my kids go to bed (7:30ish) is family time. Then I do side work for about an hour. Then I have about 1-2 hours to write, clean, hang out with my wife, watch a show, etc. And I need my 8-9 hours of sleep, so making sure the time budget is optimized is crucial!
This is actually something to think about. Before I changed my phone plan and canceled the home internet, I budgeted 4g because they throttled the speed to an annoyingly unusable level and the Comcast wifi sucked. Seriously 1st world problem lol.
When i first graduated from college, I have had to budget food in the past when I worked a poorly paying CNA job and was running out of food before my paycheck was due and had to choose between that last quarter tank to get to my parents and have my dad worry about my finances or just suck it up and let that last quarter tank get me to work until I got paid. 1st world problems of a proud woman, I know.