Budget Better By Turning Expenses Into A Routine

For most of us, the vast majority of our cash outlays come from those things that happen repeatedly and at frequent intervals. We pay our mortgage and our bills at the same time every month. Our membership to the health club needs to be renewed once a year. Car insurance payments? Perhaps every six months.

Even those expenses that don’t have due dates still tend to follow routines. We might go out to a nice restaurant a couple times a month, go grocery shopping after work every Monday, and take a vacation for a weekend in the summer and a week in the winter. Let’s face it: humans are creatures of nature, and our affinity for routine and predictability comes through all the time â“ even when it comes to our expenses.

Of course, there are always those expenses in life that cannot be predicted and don’t fit into a routine. Most of these are costs we would rather not have in the first place, and thus can’t prepare for: there are the hospital bills, the bail bonds, and the new laptop when the old one unceremoniously dies. Certainly, few crystal balls can see these costs coming.

Still, we generally follow a routine with our bills and expenditures. Since we’re already inclined to act this way, we might as well take advantage of it. Start by conducting a trial: for a few months, keep detailed track of your expenses on a calendar. Every time you pay a bill or buy yourself a bagel for lunch, be sure to write it down. Analyze your data carefully after the trial is over. What was your monthly entertainment spending? When during the month did most of this spending occur? After asking those questions of all facets of your expenditures, you can then work backwards to create a budget. This budget should allocate your spending per month, by category, and it should note the particular days when spending should occur, thus giving you the ability to see those costs as they approach.

In this manner, we can make our budget in a more natural way. Instead of determining arbitrary numbers (say, $300 per month on food), we can instead build our budget off of our natural routine. Of course, if your spending exceeds your means you’re going to want to force yourself to adapt new routines. But most of are probably pretty responsible on a routine basis. By locking into that routine, then, we can eliminate some outliers without cutting our quality of life, thus allowing us to save some money while also anticipating those expenses on the horizon.