Mindful Budgeting | Katie Proctor

2016 is the year we’re taking a hard look at our debt and where we spend our money. 

I’ve been following others’ journeys recently {specifically, Blonde on a Budget and Becoming Minimalist}, and am really inspired to do more with less.

I’m not a fan of the zero budgeting strategy, where you plan out exactly where each dollar of your income will go until you’ve “spent” it all, because the reality is something unexpected always comes up and then I feel like I’ve failed at budgeting. But from July-October of 2015, I tracked every penny of our budget and have pretty solid data to understand what we need to live comfortably in key areas {basics like groceries, gas, utilities}, and where we can significantly cut back {alcohol, eating out, Amazon Prime}.

One thing I’ve learned about myself is that I live quite a bit on impulse.

This has not only gotten me into trouble with my eating habits in the past, but also my spending. When I feel like we have “extra” money, I usually find a way to spend it. This habit started a LONG time ago in middle/high school, when I made it my mission to spend all of my paychecks pretty much the week I received them. Usually at Oak Park Mall. And let me tell you, those chain link belts and keyhole shirts from Express aren’t doing me much good right now.

Building wealth is NOT about spending every penny you have.

In fact, it’s quite the opposite. And the more you chase things, the longer it takes to internalize this.

You’re probably wondering – what does this have to do with a health & nutrition blog? 

Everything. My blog is actually about well-being, which encompasses all facets of life. And there’s a reason Dave Ramsey compares your relationship with money to “financial fitness”. It can take a long time to get your money and your body in order, and an incredible amount of discipline is required to reach your goals.

And as I’ve tracked our spending habits, it’s become glaringly obvious what feels good to spend money on, and what doesn’t. 

I like to think of it as investing vs. purchasing. Investments related to my Core Desired Feelings are worthwhile, whereas impulse purchases to accumulate “stuff” rarely are. Just as living a healthier lifestyle doesn’t = starvation, neither does getting financially fit. If you approach either extremely and completely deprive yourself, it’s not sustainable. Giving yourself a little cushion is better than giving up altogether.

With that philosophy in mind, we’ve established our new budgeting system using the Every Dollar app, and are going to be aggressively throwing our extra funds at our debt. Being tied down by your financial obligations is no way to live, and we want to be at a place where our life choices can be dictated by our hearts, rather than our monthly payments. It’s going to take time and focus to get there, no doubt. According to my estimates, our minimum debt payments {not including the mortgage} require approximately 22% of our take-home pay from our full-time jobs.

As with establishing any new routine, it’s important to have some early wins to stay motivated. This is why Dave Ramsey’s philosophy ignores interest rates at the early stages and encourages you to tackle the smallest balances first while paying the minimum on your other debts. Actually seeing progress is exciting!

After putting together our new budget, I realized that we had some funds we could use to pay off the balance that had accumulated on one of our credit cards, and paid it in full. I included it in the list of “priority” debts that I’m hanging on our fridge so I could cross it off immediately. Talk about motivating.

debt snowball

I’ll report back at the end of the month to share how much we were able to contribute to Goal #2: my lowest balance student loan. In the meantime, I highly recommend checking out this roundup of top budgeting/minimalism posts of 2015. It just might inspire you to tackle some of your own financial goals, too!