What Is a Budget Journal?

Staying financially literate is one of the most responsible ways to take care of yourself and your household. Every individual should have a budget for emergencies and future goals. A budget journal can help you attain financial independence and know where your funds are going. 

Why Everyone Needs a Budget

Budgets allow you to manage your money more effectively by putting funds into specific accounts or categories. They help ensure that you make ends meet every month while enabling you to set money aside for other goals.

Many people even withdraw cash for their budgets, as it’s often easier to understand how much you’re actively using. With prices of groceries, gas and other necessities changing, keeping cash on hand may not be practical for everyone. Still, it might be a technique worth trying if it helps deter you from spending more than necessary.

What You Can Do With a Budget Journal

You’ll be disappointed if you expect every budget journal to look the same. They’re highly customizable, but you definitely need something that allows you to list necessary categories and how much you spend on each one. Budget journaling will let you see how your spending stacks up over a certain period, and you can make adjustments to your purchases and set new savings goals as needed.

1. Keep Track of Your Monthly Spending

You should always know where your money is going. A budget journal can help you keep track of your fixed expenses, like your rent or insurance payments, and any other expenses you have throughout the measured period. Once you have a better idea of what you’re spending monthly, weekly or daily, you’ll get to formulate a plan to help you tackle unnecessary spending.

2. Set a New Financial Goal

Once you see where you can cut back on spending, you may also notice that you can save money away for a goal you’ve been wanting to achieve. The most popular finance goals often revolve around building savings or decreasing debt, both of which can leave you more financially secure than you were in the past. Some may want to save for a down payment on a house instead or move into a nicer area. Whatever your goal is, your journal can help you achieve it.

3. Feel More Responsible

Overall, having a journal specifically for budgeting and keeping track of your finances can help you feel more responsible. One of the most challenging parts of adulthood is managing so many tasks and responsibilities at once. With your journal, you’ll be able to craft a budget that works for you and leaves enough room for the spending and saving you want.

How to Create a Budget Journal

You don’t need anything special to make your journal look like your own. If you’re already used to tracking some of your finances and goals with a bullet journal, you should know how to personalize a budget journal from the beginning. Aside from the stipulation that it has to have enough free room to allow you to create your budget plan, you can decorate it or set it up to look however you like.

1. Choose Your Setup

When you start your journal, you must decide on the “budget period.” Consider when you get paid. If you’re paid biweekly, you may want to have a budget period of two weeks. If you’re paid monthly, consider making a monthly budget list. You can use any period you want — just ensure you can adhere to a budget for a short or long time. 

People who are paid more frequently might spend more frivolously on things they don’t need because they perceive that they’re wealthier than they are. You might factor that into the budget you set up. Just try to make one that’s manageable for you. If it doesn’t work, you can always adjust it later.

2. Figure Out Your Totals

Budget planning comes with knowing how much money is flowing in and out of your bank accounts over a designated period of time. You should know how much income you make — or a rough estimate, if it fluctuates — and your fixed expenses, like rent or mortgage. You may also have flexible expenses that are necessities, like groceries and gas. Other expenses are often optional, like shopping for clothes or eating at restaurants. Your budget journal can help you map out all these categories and distribute your budget evenly among them.

3. Be Prepared to Track Purchases

One of the hardest parts of a budget is sticking to it and recording everything honestly. It makes you think twice about any frivolous purchases you make. A budget journal forces you to be honest with yourself and your spending so you can make adequate changes in the future.

Over the years, expenses have changed due to several factors. In the late 90s, housing was a higher expense and food was lower, while those costs were reversed a decade prior. You may not find a way to predict how the market will fall in 15 years or so, but you can look at trends of the past and know how much to stack away for certain expenses. Budgets might be rigid, but you have the chance to be flexible with your categories for each new time period.

Make the Best of Budget Journaling

You can personalize your budget journal as much as you want or leave it bare bones with just the necessities. The budgeting process isn’t fun, but you’ll get excited when you realize just how much money you’ve been able to contribute toward healthy spending or a savings goal that matters to you. While it may not be fun sticking to a rigid budget, your finances will thank you in the future as you work toward the goal of bettering your household budget.