The BudgetBakers Philosophy
Hello there! Welcome to the BudgetBakers family! We’re glad you’re here, and we hope you’re ready to start being a budgeting genius.
“But BudgetBakers,” you say, “I don’t know the first thing about budgeting. I can’t stand that stuff!”
Great! If you’re skeptical about this whole “budgeting fad,” we look forward to changing your mind, letting you in on our philosophy, as well as saving you money every month.
The Philosophy: Every Dollar Has a Job
At its core, the BudgetBakers philosophy is pretty simple, and it gave rise to what we like to call the BudgetBakers Method. Ok, ok, we didn’t invent it. “Every Dollar Has a Job,” has been around for some time.
Since the advent of computing and spreadsheets, it’s gotten much easier for ordinary people to practice targeted budgeting- something that large organizations and governments have been doing for a long time.
Now you can too! And it’s actually fun. No, seriously. It is fun when you get used to it. Trust us!
How it works
Step 1: Building a Budget
“Every dollar has a job” means that at the start of every month, you set down spending targets for every category in life. Rent, Insurance, Bills, Car Payments, Restaurants, Spending Money, Medical, and just about anything else you can think of that needs its own little category. You can also set up “saving” categories, or categories like Gifts, Christmas, and Birthdays.
Some people even divide categories into small pieces like: Internet, Phone, Water, and Electricity, to make it easier to see exactly how much money you’ll need to budget for each category. It’s up to you to decide how detailed you need to be.
Step 2. Every Dollar Has a Job
Here’s where the magic happens. Once you’ve devised your budget categories, you “assign” your money to these specific categories.
It’s ideal if you can assign this month’s income to next month’s budget, so that you’re always at least a month ahead in cash flow. This also gives you time to react if you have to change your expected spending along the way- and that happens all the time for us.
Once you’ve assigned every dollar of income to a budget category, you’re ready to start tracking your spending. The fun begins!
Step 3. Track Spending
Ok, we admit this doesn’t sound fun at all. But it is! Really! Or at least it can be.
Now that you have a budget, and every dollar (or Pound or Euro or Yuan) of income is assigned its own job, you now know exactly how much you are allowed to spend on every single category.
So, for example, let’s say my budget looks like this:
When I enter a transaction, I can see how much is left in that category. I can spend guilt-free, as long as I stay in my budget. And if I find my budget was too optimistic, I can change it to fit my more modest goals.
Step 4: Live! (Within Your Means)
Using BudgetBakers, if I want to go to the movies, or buy a pizza, I know exactly how much money I have available for those activities. When I buy something, I just enter the transaction, and I see my new balance for that category.
I can spend guilt-free, knowing I already decided that this type of spending was ok. The dollar I am using is doing its assigned job.
Soldier on young dollar! You’re doing the right thing!
You don’t have to worry that you shouldn’t be spending money, because you know exactly how much you have planned to spend. This can stop you going overboard on spending in any particular category. You might be shocked at how much you really spend on Groceries, for example, or on Restaurants, or something else.
Step 5: Change Your Life (A Tiny Little Bit)
With the insights and knowledge you’ll gain with BudgetBakers, you’ll grow into a more disciplined, more savvy, and wiser you, when it comes to money. And you’ll start to notice tiny little things you can start to change just a little bit.
Maybe you don’t really need to buy lunch at work every day, for example. When you notice how much you’ve been spending, you might decide that a sandwich is the way to go. You’ll feel proud of the fact that you’re gaining control over your life and your finances by making smart decisions, and sticking with them every day.
And here’s where it gets FUN. Once you’re in control of your money, you never have to sit up in the middle of the night thinking about what you’re going to do to save a little extra, or feel about about spending on something you didn’t have to buy. That’s because you’ll know exactly how much you are spending, and exactly what you’re spending it on.
Knowledge, friend, is power. And you’re about to empower yourself to take control of your finances.