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Dollar bills in glass jar. Saving money, economy, finance concept.

A little while ago I told you about my word to describe 2018: Transformative. I plan to transform my different aspects of my life. One of them is my budget.

I am going to transform my budget and the way I handle money in general.

Before I tell you my plans, I’d like to ask you to think about your budgeting process.

Have you actually sat down and written out a budget?


Do you just operate, the way I used to, with a vague idea of what your expenses will probably be and then save a little here and there to meet those obligations?

It’s true. As organized as I am, I used to just handle my financial obligations very casually.

I’m transforming that process this year.

Where do you find the numbers to create your budget?
You look in two places. The first is to find all your fixed expenses. You know, insurance, mortgage or rent, car payments, education loans – things like that where the amount rarely varies each month.

Then figure out your non-fixed expenses. Those are the ones which you can’t predict but over which you do have some control. Things like restaurant or take-out meals, hair/grooming, clothes and more. Take a couple of weeks and write down each and every time you pay for something that’s not a fixed expense. At the end of the two weeks you’ll have a good idea of where you spend your money and how much your spending in each category.

Now, look at the amounts. Is there anything you want to change? I did this myself and discovered I was spending too much on eating out. This was an eye opener for me as I do like to cook and eat at home. I had gotten out of the habit of planning meals and so found that I was picking up meals here and there instead of having supplies on hand to make good meals for myself.

The other thing I was spending too much money on was mani/pedis. I had gotten in the habit of going every couple of weeks. I can reduce that to once a month.

Did you know that you can reduce your electric utility bill by setting your thermostats? If you have a programmable thermostat you can set it to reduce the heat while you’re at work and then raise the temperature in time for your home to be comfortable when you return from work.
You can do the opposite in the summer with the air conditioning. Set the thermostat a little warmer when you’re not at home and make it cooler when you are at home.

Also, if you can get in the habit of unplugging appliances when they’re not in use that can also save electricity. Some appliances use electricity when they are plugged in, even if they are not actually in use. Be sure to also turn off the lights when you leave a room.

You can save money on gas by planning your errand route efficiently. Group errands together so that you only travel once in that direction instead of making multiple trips. Car pooling is another way to save money on gas.

I decided to open a separate bank account for my household expenses. This way I can set aside money for my property taxes and insurance payments. I wanted to keep this money separate so that I wouldn’t forget that it has a purpose. When it gets mixed in with my personal account, I forget that the money is earmarked to pay a specific bill.

Another thing that I am doing to transform my relationship with money is to save money for special purposes. For instance; I think I mentioned that I want to redo my closet. Instead of charging that fee on my credit card and paying for it over time, I’m going to figure how much it will cost and save that money. This way, I won’t be paying more for the closet makeover as I won’t have to pay the interest on the credit card!

By the way, I’m also saving money for my retirement in an IRA. Money has to be set aside each month, so I can contribute the full amount to that account each year.
What’s your relationship like with your money? Are you comfortable with it? Do you want to change it up? Maybe save more and spend less?
I’d love to know!

PS I have a free printable budget worksheet in the Resources page on my website.



  • Seana Turner says:

    My husband and I use Quicken to track our spending. It works well for us because we can each input and review on our own time. Then we have a central filing for paperwork. I think it is great to be able to quickly assess how much we’ve spent on Christmas or another category. Another tip is to just call your current providers (e.g. cable), and ask if they can offer you a better deal as you are re-evaluating your choices. Sometimes they will offer you a better plan just to retain your business!

  • Congratulations, Diane! These are impressive changes that you’re making. I love your thought process for getting a handle on your expenses and figuring out where to trim and to save. You are inspiring!

  • Good for you, Diane. Good luck with your budget. Remember, you may have to adjust it throughout the year on the quarterly and yearly expense months if you have additional bills in those months.

    I create a budget or what I call a “projected expenses/income” spreadsheet. The traditional budgets can be confusing for people to follow, so I created my spreadsheet. It shows fix expenses, variable expenses, savings (savings acct contributions, 529 plans, 401k contributions, etc..) quarterly, and yearly expenses that come up throughout the year and what the actual income should be for each month.

    I do use Quicken Budgets, but my “projected expenses/income” spreadsheet includes everything a budget would have to give me the big picture but not the yearly breakdown of all the expenses that most budget software offer. Since it shows month by month expenses and quarterly/ annual expenses, I can easily see how much money I have left for that new car, adding money to savings, etc…

    In Quicken you can quickly schedule recurring bills with the average amount due per statement. When the bill comes in, if the actual cost is higher than the projected cost, I know right away that the budget amount is lower than the actual amount. This is a red flag for me to reduce spending in another area.

    All these steps put together help us determine what we need to adjust and what can be reduced altogether.

  • Congratulations on taking these big steps – and for sharing your strategies with the rest of the world. It’s way too easy to throw things on the credit card, and even if you think “I’ll pay for it when the bill comes in” sometimes things happen and we don’t earn the money we expected to, or a financial emergency comes up, and then boom.

  • Good for you, Diane. We know that getting organized saves our clients money so organizing our finances is almost like double saving! I meal plan and try to use ingredients that are on sale at the supermarket that week. Reviewing the supermarket sale circular and meal planning around that has saved us money and helped to keep us healthy.