budget

Budget Decluttering: 3 Simple Steps

September 23, 2020

Hello friends! Today I am going to share with you how to declutter your budget. This is a way to look clearly at your spending and My husband and I just took a look at ours at the beginning of the pandemic and found that we could easily save $500-600 a month just in our grocery budget. I blogged about how we did it here

Life is rarely constant, so this is something that needs to be reassessed frequently.

Making a Plan

When sitting down to declutter your budget and make a plan, gather a couple of months of bank/credit card statements, receipts, some highlighters, a pen, and a notebook. 

Step 1: Look at the Past 

Go through you checkbook/bank statement and receipts for the previous month (or two) and record every single purchase that you have made.

Take an inventory of exactly how much your basic living expenses cost and write that number down. Mortgage/rent, utilities, vehicles, etc.

Step 2: Get Organized 

Categorize your purchases into food, entertainment, gas, necessities, etc.

If you do not have a plan, your default plan will be disorder – which leads to failure.

Step 3: Locate the Abundance in your Budget 

Look specifically for where you have spent money without thinking. Look at app purchases, subscriptions that you’re not using or that are unnecessary, drive-thru coffees, and other “mindless” spending. Write all of them down and calculate a total. Vow not to do that anymore and then start using the “excess” to pay down debts.

Awareness Leads to Change

In our personal budget, I found that we could declutter our grocery budget and random Amazon spending. I cut our grocery budget in half simply by having a meal plan, using what we already have (which cuts way down on waste and feels so good!)

This exercise puts into perspective what is a necessity, where there is room for compromise, and where there is not. For instance, we won’t compromise on our health and wellness but will on entertainment, junk food, or other things that do not support our ultimate goal for health, family, and wellness.

Another thing we’ve done is not spend money other than necessities for a month, just to see what it feels like. So much of our spending was “pleasure” spending. A shirt here, a toy there, etc.

We have all had instances where we cleaning out and donating just to make space for the new stuff and why do we NEED the new stuff? This is a practice in mindful spending and something that has helped me have a healthier mindset when it comes to saving or spending.

Tomorrow, I will share how to pay off debt with the excess you find in your budget. It is a simple formula that can be quite significant.

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