A photo finish is a good thing when budgeting


If you’re like me, you may procrastinate, but you don’t like it. You don’t enjoy waiting until the last minute to get things done.

And in general, it feels better to have some leeway, rather than cutting things close.

However, when it comes to making a plan for your money, you actually do want to cut things close. And this can cause some discomfort until you know to manage it.

No good reason to be under

Each month, I recommend dividing your expenses (glossary) into categories based on your projected spending. So for example, if you know that you usually spend $300 on groceries, and that’s a good figure for you, you would allocate $300 for groceries, and then not spend any more than that amount in that category. Do this with all of your spending categories until you’ve completely allocated all of your money.

Remember: Income = Bills + Expenses. So subtract all of your bills from your monthly income, and whatever remains is allocated for your expense categories. And I include savings in with the bills, which I mention for a reason: with savings already accounted for, there is no good reason to try to be “under” in any of your categories.

We’re used to liking leeway

This will feel stressful to those who like to have leeway. In a given month, you may get two-thirds through, and find that you’re almost out of money in your categories. In fact, you only have one-third of your money left! Panic!

Except, that’s exactly how it should be. You want to be creating targets such that by the end of the month, you’ve spent everything in the category. If you’re going under, then you’ve set the categories incorrectly. (Same thing if you’ve gone over, come to that.)

Now, granted, expenses are never truly spread out equally over the course of a month. If you have a $300 target, you will never spend $10 per day in groceries; you go a few times a month and buy lots of things in one go. (Or at least I do.) This can mean that you might be completely all spent-out in one category before the end of the month!

But this too is intentional. The chances of you hitting your target on the very last day of the month are slim. And if, say, you’ve spent everything in your category (or categories), remember that when day one of the new month hits, all your targets return to zero. As I believe they say in sports, in the beginning everyone is undefeated.

Hit the bullseye

It can be tempting to want to be “under” in your categories, because we’re used to wanting to have leeway. But try to push past that built-in desire. Think of your category targets more as a game of darts. You want to hit the bullseye, not steer clear of it.

Or, since going over is not a good thing, think of it more like The Price Is Right: you want to get as close as possible without going over.


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