Warren Buffet and Bill Gates once got together (I know kind of crazy right) and were asked the key to their success. Each of them, independently, said focus.
Does that make you rethink all the little things you’ve been chasing as of late? If two of the wealthiest individuals in the world both believe that focus is the single most important ingredient that got them to where they are at, shouldn’t we take note?
The beauty of it is focus can be applied to anything, including budgeting.
If you are a regular reader of this site you’ll know we’ve touched on a ton of great budgeting topics lately. Everything from how to set up a budget, some monthly budget categories and even how to budget with your significant other.
Today I want to do a deep dive and tell you how I utilize focus to avoid overspending in my monthly budgeting.
Avoiding overspending in my monthly budget
My monthly budget has quite a few categories. Everything from how much we spent on our children to how much we spent on gas. Sometimes (actually more often than I’d care to admit) spending goes higher than I’d like.
For instance, last month wasn’t so hot. There were a lot of things on the budget that didn’t go as planned. Some times you just have those months I guess. I just get overwhelmed and everything gets out of hand.
Having that many categories, especially when I’m feeling overwhelmed, makes focusing on any one thing difficult.
Focus and Budgeting
Every month a few things happen related to my budget. The first is I review last month’s spending. I ask myself a few questions.
How did it go? Are there any areas that got a little out of hand?
The second thing is that I discuss next month’s budget with my wife. This is actually on my todo list today. We touch on several different items that help me put some math to what our month will look like.
Thirdly, I look at our completed budget to see if there are any areas that we are likely to get carried away. For instance, when Christmas rolls around we tend to get a little carried away with the “Christmas Spirit” and overspend. I learned that lesson the hard way.
Now I’ve utilized those lessons for future years.
After reviewing all those items I’ll communicate anything that jumps out with me to my wife. It seems that there is always that one budget category that got out of hand.
That one birthday party, family get together or trip that just we just spend way to much. Unfortunately those are one off items that you can’t do much about. We will certainly take these things into account but that may not be for a while.
Other times its that we spent too much on the kids or the grocery.
DING DING DING!!
Now those are items we can apply a little focus to and keep a close eye on next month.
Two tips to applying focus to budgeting
The first step is that you’ve got to utilize data. If you aren’t budgeting then you’ve got no data to use. Data is so important as you start to make decisions that will have long lasting ramifications on your financial life.
Once you start to get some overall data I’d start to dig deeper into the numbers. If you don’t know what I mean I’d just start looking at your spending numbers and see if anything pops out at you.
For instance, I was looking at my grocery spending for one particular month and realized there were a lot of transactions. That didn’t seem quite right because we only plan on taking one trip a week.
What I realized was that, while we were going over on our grocery budget, it wasn’t the main weekly trips that were getting us. It was the secondary trips.
This leads me to my second tip: keep things simple.
For the grocery example I took it the next step and communicated to my wife that we really need to focus (aha see what I did there) on only taking one grocery trip per week.
Utilizing focus in my budgeting and spending has been a huge help. It has allowed me to keep things simple and not get overwhelmed in all the data, categories and transactions that occur every month.