I'd love to kick off the new year with a flashy headline like "Top 5 New Investments to Become a Millionaire This Year," but let's be honest—that's not my style. For most of us, January is about pressing reset, shedding the bad habits we've picked up over the past year, and returning to the basics. That's why I'm revisiting an old but essential topic: budgeting.
So, what is budgeting, really? It's not just a backward glance at last month's expenses. As Google puts it: "Budget: noun - an estimate of income and expenditure for a set period of time." Simply put, a budget is a plan for your money from the start.
Having a baby last year added a whole new level of chaos to our usual budgeting routine. Some months, the budget was just a recycled copy from the month before, and our so-called "budget meeting" occurred with a glass of wine with Sunday Night Football playing in the background after the baby went to sleep.
In these seasons of busyness, it's important to focus on the big stuff. I've shared this before, but it bears repeating: Stephen Covey's Big Rocks analogy is a game-changer for managing priorities. If you haven't seen it, here's the video: https://youtu.be/pHR4RpxD6m0?si=s-WgsgqC7PidhnUG
When time is tight, and you don't have time to do a proper budgeting meeting, start with the big rocks: tithing, retirement savings, mortgage payments, and major financial goals. Let the smaller expenses—the pebbles and sand—fill in around them. When you take care of high-priority goals and essentials, even a chaotic month won't hinder your financial progress.
3 Common Budgeting Mistakes
Even with the best intentions, certain habits—or lack thereof—can still derail your financial plan. Over time, I've noticed three common mistakes that often interfere with a budget's success.
1. Not Having a Process
"When scientists analyze people who appear to have tremendous self-control, it turns out those individuals aren't all that different from those who are struggling. Instead, 'disciplined' people are better at structuring their lives in a way that does not require heroic willpower and self-control." - James Clear.
Budgeting is one of those tasks that's incredibly valuable for long-term financial success but rarely delivers instant gratification. Without a process, it's easy to wait until later, use last month's budget, or forget to budget altogether.
A solid budgeting process isn't about relying on endless willpower—it's about building a structure that makes budgeting feel automatic and repeatable. Whether it's a set day each month for a budgeting check-in, a specific tool or spreadsheet you always use, or a routine that involves your partner or family, having a defined process removes the guesswork and keeps your financial plan on track.
2. Abusing Miscellaneous
When you're new to budgeting, the "miscellaneous" category can feel like the easy button—an all-encompassing safety net for expenses that don't neatly fit elsewhere. But here's the catch: everything can be labeled miscellaneous if you try hard enough.
The key to effective budgeting lies in specificity. Broad categories like "food" instead of "dining out" or "house stuff" instead of "personal care" can blur the reality of your spending habits. You might not realize you're spending more at restaurants than on groceries or that your skincare routine has quietly increased by 35% over the past six months.
Clear, detailed categories give you visibility into your financial patterns, making it easier to adjust and stay in control.
3. Forgetting Predictable Expenses
As Dave Ramsey famously says, "Christmas will be in December this year." In other words, being caught off guard by predictable expenses isn't just frustrating—it's entirely avoidable.
You know when your kids', parents', and friends' birthdays will roll around. In Missouri, you know your personal property taxes are due at the end of the year every year. These aren't surprise expenses; they're recurring events on your calendar.
Yet, it's all too common to see these predictable costs turn into budget busters. The solution? Plan for them. Build these expenses into your monthly budget by setting aside a little each month. When Christmas—or any other significant expense—arrives, you'll be ready, stress-free, and in control.
3 Practical Tips to Make Budgeting Easier
Budgeting doesn't have to feel like an uphill battle. With a few practical strategies, you can simplify the process and set yourself up for success. Here are three things you can do to make budgeting easier:
1. Check Your History
Starting a budget is hard when you haven't done one in a long time (or ever). The best predictors of what next month's expenses look like are the same month last year and last month. For example, my anniversary falls in February. If I check my budget for February 2024, I'll see my anniversary, Valentine's Day, and my father-in-law's birthday all hit in February. By using those expenses from last year and this January's expenses for things like groceries, you get a good picture of what next month will look like.
2. Make It Less Awful
Budgeting doesn't have to feel like a chore. Pair it with something enjoyable to make the process more appealing. Maybe you have your monthly budget meeting over a cozy brunch on the last weekend of the month, or perhaps it's a quiet evening with your favorite bottle of wine after the kids are in bed.
You can also turn budgeting into a game to make it more fun and engaging. Challenge yourself to find creative ways to save or set a friendly competition with a partner to see who can stay under budget in a specific category. Add a small prize for the winner to keep things exciting!
As you start to see the rewards of budgeting-like finally hitting your savings goals or feeling less stressed about unexpected expenses—it can even become something you look forward to. Watching your progress month after month is a powerful motivator to keep going.
3. Use Sinking Funds and Auto Drafts
"One thing I am sure of in my Total Money Makeover: I had to quit telling myself that I had innate discipline and fabulous natural self-control. That is a lie. I have to put systems and programs in place that make me do smart things." - Dave Ramsey, The Total Money Makeover
Creating systems that automate smart decisions is one of the best ways to stick to a budget. With technology, it's easy to set up automatic payments and transfers to various accounts without much effort. When you automate, you remove the temptation to divert funds elsewhere—it's one less decision to worry about.
Sinking funds are another powerful tool to prepare for large, predictable expenses. For example, my dogs' annual checkups happen every November, and they're pricey. Instead of scrambling or dipping into savings, I set aside a small amount each month to cover that expense.
You can use sinking funds for holidays, vacations, insurance, tax payments, or any other big-ticket items that could otherwise disrupt your budget. By planning ahead and systematizing your financial priorities, you'll feel more in control—and less stressed—when those expenses roll around.
Start the Year Strong: Take Charge of Your Finances Today
There's nothing like an exhilarating budgeting talk to kick off the year with intention. The New Year is a perfect opportunity to refocus on the essentials, build better habits, and set yourself up for success. Taking a little time now to refine your budget can ensure your 2025 starts on a positive financial note—one where your goals feel achievable and your money works for you.
Ready to take control of your finances this year? Let's make it happen together! Schedule a consultation today, and we'll create a personalized plan to help you work towards your financial goals with confidence.
Rob Clark, CFP®, is a CERTIFIED FINANCIAL PLANNER® professional at INT Wealth Planning, serving upper-income professionals in the Greater St. Louis area. Rob specializes in simplifying complex financial decisions and creating tailored strategies for wealth accumulation and retirement planning. INT Wealth Planning focuses on helping clients get organized, make informed financial decisions, plan for retirement, and pursue financial confidence. Rob can be reached at (636) 777-4207, via email at rob@intwealthplanning.com, or online at www.intwealthplanning.com.
The opinions expressed in this material are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security, investment, or other financial product.
This material has been prepared in collaboration with Crystal Marketing Solutions, LLC, and has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, and CERTIFIED FINANCIAL PLANNER® in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.
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