7 Habits to Highly Effective Budgeting

This is a guest post by Brad Chaffee from Enemy of Debt, “Where Behavior Meets Reality”, Brad motivates his readers to believe in their ability to win with money by becoming debt free. You can check out his 31 Day Manage Your Money Project, and win $100s of dollars in prizes for participating in his challenge. Please subscribe to his blog to receive motivational updates.

Let me start off by saying that I think budgeting is very misunderstood. We tend to feel squeezed, constricted, forced, and abused every time we hear the word budget. I admit that I used to feel that way too, but there was a little more to it than that. In all honesty, it was a time when I was afraid to face the truth about what our situation really looked like.

I was afraid to learn:

  • How much were we spending?
  • How much were we wasting?
  • What our financial situation really looked like?

It was then that I realized I was afraid of answering the wrong questions. The questions I needed to be afraid of sound like this.

  • How much do we have saved up?
  • How much is having this debt affecting us?
  • How will we pay for our kids college?
  • What will retirement look like?

We realized that the last four questions were scary enough to force us into action. As opposed to the first set of questions, which only kept us from taking any action at all.

Are you asking yourself the right questions? Be honest with yourself, because that is the only way your situation will ever change. You cannot keep on doing the same things with your money, and expect the outcome to be any different. You have to do something else. That’s your only other choice.

Now that I’ve hopefully got your attention, let’s take a look at some things that will help you win with money.

7 Habits to Highly Effective Budgeting

Spend It On Paper On Purpose - You can no longer accept sitting on your hands, just watching your money walk away. You have to tell it what to do, and then make sure that it does it. Your money is like a child that doesn’t listen. We don’t just let our kids go out into the world without guidance do we? Your money should be handled the same way. You have to make it behave so that it can one day make you proud.
“Needs Vs. WantsAwareness - So often we eagerly, but improperly, classify wants as needs, in order to make ourselves feel better about spending money. In doing so, we fail to realize the missed opportunities to save, pay off debt, and secure our future. You have to challenge yourself to be honest and true about what you’re really doing.

Teamwork and Accountability – If you’re married teamwork is absolutely essential. You have to “dream together” in order for your budget to work properly. If you are single, you have to work even harder at holding yourself accountable, because if you don’t who will?

Fight Impulse Spending – Dave Ramsey calls this “death by 1000 cuts.”, and anyone who has watched their money vanish, knows exactly what he’s talking about. Impulse spending can do more damage to your budget an unexpected emergency, because impulse purchases are so small that you barely notice. The key difference is that impulse spending is preventable.

Think Ahead – It usually takes a few months to get the hang of budgeting, but the one thing that really helped us the most, was thinking ahead in order to better prepare. Budgeting is like Chess in that it requires you to think several moves in advance. It is when you are unprepared that your budget will seem pointless. Be sure to plan ahead for those irregular expenses.

Live Debt Free – That’s right, living without debt can give you the best advantage for making sure   your budget works. It gives you more of your money to do the things that are important to you. Being debt free gives you many more options each month and allows you to manage your money without all the stress.

Unwavering Determination – When it comes to budgeting this is obviously the most important. Without that inner drive and motivation to excel, your budget plan will never gain enough traction. The only other option is to go back to doing the same things that got you where you are today. We both know you deserve better than that.

Do you have what it takes to be highly effective? I think you do, but you’ll never know unless you give it a try.

photo credit

Kelly’s notes: If you tuned in on Monday we had a discussion about needs vs. wants on the ¢entsible show. Melissa, from Girly Mama, even mentioned needs vs. wants when I talked about wanting to purchase Uggs after she tweeted about a 50% off sale. For me the way to stay motivated is to ask, do I really want this or would I rather be debt-free? Usually the answer is debt-free and the item gets struck from my shopping list.

How about you? Do you maintain a budget, and if so, how do you stay motivated to stick with it?

About Kelly


is the founder of The Centsible Life, a blog where motherhood and money meet. Her goal is to help readers live well on less. Kelly is a mom to 4, and loves that she can stay at home with her kids, and still pursue her passions for writing, personal finance, and social media. You can often find her on twitter and Facebook talking money and motherhood.

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  • http://nodebtforus.blogspot.com TexasT

    I know there are many methods of budgeting, and many of the ways to budget comes down to a person just sitting down and working it out over many months or years on paper or in a spreadsheet. I created my method, and I'd like to offer it up to your readers, in hopes that it gives them a 'leg up' on the process of creating and maintaining a budget:

    http://nodebtforus.blogspot.com/2009_12_20_archiv

    The budget spreadsheet is found in post #3

    • http://www.enemyofdebt.com Brad Chaffee

      Any budget is a good budget as long as it works for whoever is using it. Thanks for sharing! :)

  • http://nodebtforus.blogspot.com/ TexasT

    I know there are many methods of budgeting, and many of the ways to budget comes down to a person just sitting down and working it out over many months or years on paper or in a spreadsheet. I created my method, and I'd like to offer it up to your readers, in hopes that it gives them a 'leg up' on the process of creating and maintaining a budget:

    http://nodebtforus.blogspot.com/2009_12_20_archiv

    The budget spreadsheet is found in post #3

    • http://www.enemyofdebt.com/ Brad Chaffee

      Any budget is a good budget as long as it works for whoever is using it. Thanks for sharing! :)

  • http://www.EngagedMarriage.com Dustin

    Excellent post Brad, and thank you Kelly for hosting it. I firmly believe that a sound and cohesive financial plan is one of the cornerstones of a happy marriage. And it all starts with a good budget! :)

    • http://www.enemyofdebt.com Brad Chaffee

      Thank you Dustin! You are right, without a budget, a marriage has more chance of hitting some major roadblocks! It was when my wife and I decided to handle it as a team that it really started to get some traction.

  • http://www.EngagedMarriage.com/ Dustin

    Excellent post Brad, and thank you Kelly for hosting it. I firmly believe that a sound and cohesive financial plan is one of the cornerstones of a happy marriage. And it all starts with a good budget! :)

    • http://www.enemyofdebt.com/ Brad Chaffee

      Thank you Dustin! You are right, without a budget, a marriage has more chance of hitting some major roadblocks! It was when my wife and I decided to handle it as a team that it really started to get some traction.

  • http://www.uprinting.com Victor | UPrinting

    Thank you for sharing. I agree that instead of focusing on how much we are spending, we can focus more on how much do we have to save. Saving up for the future is really necessary whether we are in a stable or unstable economy.

    • http://www.enemyofdebt.com Brad Chaffee

      That's right Victor, asking the right questions the right way can force us into action instead of making us scared to act. Thanks for sharing! :)

  • http://www.uprinting.com/ Victor | UPrinting

    Thank you for sharing. I agree that instead of focusing on how much we are spending, we can focus more on how much do we have to save. Saving up for the future is really necessary whether we are in a stable or unstable economy.

    • http://www.enemyofdebt.com/ Brad Chaffee

      That's right Victor, asking the right questions the right way can force us into action instead of making us scared to act. Thanks for sharing! :)

  • http://www.stumbleforward.com Chris Holdheide

    Great post, I’m currently in the middle of Brads challenge and I do have to say one thing budgeting is tough when you just getting started. If your like me I just stare at a mountain bills and think I’ve got to get all of this stuff in order. It can be a bit overwehlming at times but like you said you have to have that unwavering determination.
    .-= Chris Holdheide´s last blog ..Even Dave Ramsey Says Timeshares Are A Bad Investment =-.

    • http://www.enemyofdebt.com Brad Chaffee

      Determination is key. there have been some rough months along the way, and my wife and I could have given up and decided it was too hard, but instead we stuck it out, and battled our way through to success. Looking back I couldn't imagine being in the same place we were because we decided to give up.

      Keep the budget alive!

  • http://www.stumbleforward.com/ Chris Holdheide

    Great post, I’m currently in the middle of Brads challenge and I do have to say one thing budgeting is tough when you just getting started. If your like me I just stare at a mountain bills and think I’ve got to get all of this stuff in order. It can be a bit overwehlming at times but like you said you have to have that unwavering determination.
    .-= Chris Holdheide´s last blog ..Even Dave Ramsey Says Timeshares Are A Bad Investment =-.

    • http://www.enemyofdebt.com/ Brad Chaffee

      Determination is key. there have been some rough months along the way, and my wife and I could have given up and decided it was too hard, but instead we stuck it out, and battled our way through to success. Looking back I couldn't imagine being in the same place we were because we decided to give up.

      Keep the budget alive!

  • http://www.moneymakingsense.com Ken

    These are great tips. A great read for anyone examining if they want real changes in their money habits. Good job.

    • http://www.enemyofdebt.com Brad Chaffee

      Thank you Ken I am really glad you enjoyed it. I am just sorry it took me so long to get back to everyone.

      We are in the middle of selling our house, which is a decision we just made this week, so the paper work and time consuming part of the deal has been keeping me away. :D

  • http://www.moneymakingsense.com/ Ken

    These are great tips. A great read for anyone examining if they want real changes in their money habits. Good job.

    • http://www.enemyofdebt.com/ Brad Chaffee

      Thank you Ken I am really glad you enjoyed it. I am just sorry it took me so long to get back to everyone.

      We are in the middle of selling our house, which is a decision we just made this week, so the paper work and time consuming part of the deal has been keeping me away. :D

  • http://deliverawaydebt.com Jeff

    Great habits to get into. I got into same 7 about a year ago, and budgeting has never been so easier.
    .-= Jeff´s last blog ..Net Worth – February 2010 =-.

    • http://www.enemyofdebt.com Brad Chaffee

      That's cause you are the man Jeff! Keep delivering away that debt my friend and I will be right beside you to celebrate! :)

  • http://deliverawaydebt.com/ Jeff

    Great habits to get into. I got into same 7 about a year ago, and budgeting has never been so easier.
    .-= Jeff´s last blog ..Net Worth – February 2010 =-.

    • http://www.enemyofdebt.com/ Brad Chaffee

      That's cause you are the man Jeff! Keep delivering away that debt my friend and I will be right beside you to celebrate! :)

  • http://twitter.com/itgetsbetter @itgetsbetter

    Great post Kelly! I plan on watching later today but ironically I missed your show the other night because I had a "meeting" with my husband to go over our budget. We were trying to factor in all the various activities that need to be paid for over the summer. We signed up for Mint.com and I hope it will be a big help. It reminds me of Weight Watchers. I always lose more weight when I journal what I'm eating. I think that seeing our spending in black and white (and pie charts) will really help.
    I also need to remind myself to stop comparing myself to others. They may have a lot more material things but we have things that are important… love, happiness, etc. Like Melissa said it is all about keeping it in perspective.

    • http://www.enemyofdebt.com Brad Chaffee

      You will find that Mint.com is an excellent and very resourceful way to manage your money. I plan on checking it out myself more in depth after my Manage Your Money challenge is over. :) Good luck!

  • http://twitter.com/itgetsbetter @itgetsbetter

    Great post Kelly! I plan on watching later today but ironically I missed your show the other night because I had a "meeting" with my husband to go over our budget. We were trying to factor in all the various activities that need to be paid for over the summer. We signed up for Mint.com and I hope it will be a big help. It reminds me of Weight Watchers. I always lose more weight when I journal what I'm eating. I think that seeing our spending in black and white (and pie charts) will really help.
    I also need to remind myself to stop comparing myself to others. They may have a lot more material things but we have things that are important… love, happiness, etc. Like Melissa said it is all about keeping it in perspective.

    • http://www.enemyofdebt.com/ Brad Chaffee

      You will find that Mint.com is an excellent and very resourceful way to manage your money. I plan on checking it out myself more in depth after my Manage Your Money challenge is over. :) Good luck!

  • http://intensedebate.com/people/the_enemyofdebt Brad Chaffee

    Thanks Melissa! ;)

    Just so everyone knows, I am not ignoring your comments for the rest of the day, I am going skiing and will be away from the computer. I want to thank you Kelly for allowing me to guest post!

    I will certainly respond later tonight when I return! Please enjoy! :)

  • http://intensedebate.com/people/the_enemyofdebt Brad Chaffee

    Thanks Melissa! ;)

    Just so everyone knows, I am not ignoring your comments for the rest of the day, I am going skiing and will be away from the computer. I want to thank you Kelly for allowing me to guest post!

    I will certainly respond later tonight when I return! Please enjoy! :)

  • http://www.andreamatone.com/ Andy Photographer

    Excellent. that's were all the money went.. I will print this out and share it with my boss tonight when I came home and see what she says.

    • http://www.enemyofdebt.com Brad Chaffee

      That's a great idea Andy! I hope you can let us know what the boss thinks. ;)

  • http://www.andreamatone.com/ Andy Photographer

    Excellent. that's were all the money went.. I will print this out and share it with my boss tonight when I came home and see what she says.

    • http://www.enemyofdebt.com/ Brad Chaffee

      That's a great idea Andy! I hope you can let us know what the boss thinks. ;)

  • http://www.girlymama.com melissa

    this is a TERRIFIC post! i agree, kelly, in our household we are constantly reminding ourselves about needs vs wants… and not just with the kids ;-) its a great way to curb impulse spending.
    that and just not spending money. i was itching to buy those uggs last night, but we're on a spending freeze right now as we wait to hear about my husbands raise (or lack thereof) this month. its hard to be self-disciplined.
    frankly, what is really helping me now is thinking about the big picture. can i really be upset about not buying uggs when people in chile and haiti don't have water or food for their children? no way.

  • http://www.girlymama.com/ melissa

    this is a TERRIFIC post! i agree, kelly, in our household we are constantly reminding ourselves about needs vs wants… and not just with the kids ;-) its a great way to curb impulse spending.
    that and just not spending money. i was itching to buy those uggs last night, but we're on a spending freeze right now as we wait to hear about my husbands raise (or lack thereof) this month. its hard to be self-disciplined.
    frankly, what is really helping me now is thinking about the big picture. can i really be upset about not buying uggs when people in chile and haiti don't have water or food for their children? no way.

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