I have often heard people say, I have a budget – I know every bill I have to pay with each paycheck. Thus they feel they have a budget. But a budget is not a schedule of payments. It is an intentional plan based on your values. So if every dollar doesn’t have a name on purpose and on paper…it will just disappear. There will be unintended spending and goals/values/dreams will not be pursued. As a result, you will simply continue to live paycheck to paycheck…even though you thought you had a plan.
So try it this month – put it on paper before the month begins. Give every dollar a name. Don’t leave anything at the bottom. Now that doesn’t mean don’t have anything in your bank account. It’s prudent to keep a buffer in there – maybe $100-$200. But in your budget make it clear what you will do with every dollar. And if you have something left over go back and give it a name. Add some to savings, start a debt snowball, make sure you have some pocket money, etc.