Money is frustrating; I get it and also realize that people are struggling to make ends meet.
It’s not a situation that anyone wants to be in; however, finding a way to change is possible.
Imagine watching a movie that had little to no detail where it had apparent missing parts.
At the end of the movie, you’re still wondering who did it, why they did it and other missing pieces.
For a puzzle to be complete, you need to have all of the pieces.
Lacking details most often leads to less than desirable results.
This is why budget failure happens and perhaps why budgets get a negative rap.
I won’t lie to you, but debt-freedom is a pretty awesome rap to have!
Budget Failure Is Typical
Have you ever failed at budgeting?
Budget failure is typical, especially for newbies but it can get better provided you have a financial plan.
Before you even begin considering a budget is crucial to map out what you want from it.
Budgeting is about tracking debt, expenses and savings. Pretty simple right?
While that type of basic information is suitable for some people, it’s not for others.
If budgeting is something you’re committed to, then try a different budget.
We’ve been through 4 styles of budgeting until we found the right one.
I know the process is half the battle, but the outcome is worth every minute.
The Importance Of Details
No matter what we spend our money on, we often want to know the details.
For example, if you’re buying a house, you want to know everything about that house.
Having the informative details also means they include the good, bad and ugly.
Why would you invest money into something that won’t fit your lifestyle or budget?
Another example is buying a new product at the grocery store and your desire to know the ingredients or health information.
Saving money has long been a part of everyone’s thoughts and dreams, but not everyone does it.
Taking money advice from people who are struggling to make ends meet is not something we’ve done.
We’ve only followed a handful of successful financial bloggers because that’s where we want to be, successful.
You’re only going to learn how people get out of debt if they do from bloggers who are in debt.
That’s fine if that’s who you want to trust with your money principles but consider success just as important.
For example, I want to be prosperous or debt-free, which my readers often tell me is their goal.
With any budget we’ve used, it was noticeable after months of experimenting that we wanted to know more.
Budgeting Isn’t For Everyone
We’ve also learned about various types of people who use a budget or don’t believe in budgeting.
Don’t get me wrong, if you think budgeting sucks or isn’t going to help your purpose, then that’s fine too.
Ultimately the money manager directs the path in which one wants to take financially.
- Lazy Budget User used to be us before CBB even existed. Using our bank account to budget was all we thought we needed.
- Detailed Budget Geek (that’s us) This is where we are at today and continue to use it monthly.
- Simple Budget User may be a paper and pencil budget, money jars, envelope budgeting.
- Technology Budget styles use budgeting mobile apps or online versions of a paid budget.
- Excuse Budget User is the person who does not budget nor believes in using one as the money goes in and out. There may or may not be any savings, investing or emergency savings because there’s always an excuse to spend.
I can probably think of many more, but I want to point out the benefits of a detailed budget for the sake of this post.
We didn’t just jump into a detailed budget; instead, it came about out of curiosity.
How Our Budget Has Changed
Eventually, our detailed budget led us to pay our mortgage in 5 years and completely debt-free.
These days this is virtually unheard of unless you inherit money or win the lottery.
We also credit using two online banks Simplli Financial and Tangerine, with low to no charges.
We have been with Simplii Financial for almost 20 years without any issues.
We love them the most because they are a no-fee bank, and they accepted me when I first moved to Canada.
It’s one of the best banks in Canada that do not have a brick-and-mortar bank.
Everything is done online or on the Simplii Financial App, which we also use no monthly fees.
We also use a Tangerine World Mastercard to Earn 2% Money-Back Rewards on purchases in two 2% Money-Back Categories of your choice and 0.50% Money-Back Rewards on all other purchases.
These all offer different rewards for us, which is why we chose them to be part of our financial plan.
Launched in 2016 as Canada’s first-born digital bank, EQ Bank has more than $5 billion in deposits and is committed to bringing more innovative banking solutions to Canadians.
Finding the right bank is essential, and for us, no fees were a big YES, as were excellent reward opportunities.
For example, our PC Optimum Points are at 6 million or over $6000 to spend at Shoppers Drug Mart or a Loblaws store.
10 Steps To Budgeting For New Users
However, consider a detailed budget for those who want financial stress to be a thing of the past.
Trust me on this; it will be the eye-opener you wished you were aware of earlier.
In saying that, I strongly recommend anyone who has never used a budget to read my mini budgeting series.
It includes ten steps or blog posts that detail how we created our budget using baby steps.
That means that we took our time researching and putting a budget together that might work for us.
It turns out that it did, and it didn’t stop there because we’ve increased our knowledge with detail.
I know, you’re probably saying, Mr. CBB, what in the heck is a detailed budget?
Let’s take a walk into our budgeting past to see what a detailed budget is and how we made it there.
What Is A Detailed Budget?
A detailed budget gives you more information about a specific budget category.
For example, let’s use the grocery budget category.
Instead of just a grocery budget, you could add a sub-category of cleaning supplies: toilet paper, laundry soap, dish soap, paper towels, tea towels, dishcloths, and apparent cleaning products.
Instead of mixing them both into the grocery budget category, you divide them.
The reason for this is to understand in detail how much your household supplies are costing you vs. food and drink.
With this information, you may find out that you spend too much money on groceries or household products.
You take this information and figure out a plan to combat the budget category or sub-category to reduce costs.
Perhaps buying a lower costing hand soap or stocking up on deals in this category may do the trick.
It allows you to have options with details, and with every budget, options are a good thing.
This also gives the user control over where the money is going instead of guessing.
For example, our grocery budget is just for food and health, and beauty is for all the others listed above.
Who Should Use A Detailed Budget?
A detailed budget takes longer to process, but the outcome is more data to work with.
This helps the user to pinpoint areas that they can improve to save more money and pay off debt.
If you’re wondering why we still use this budget since we are debt-free, we want to keep saving.
I believe anyone can use a detailed budget, but this may be valuable for someone who wants to tighten the rope.
Having as much detail as possible when you struggle to make ends meet or want to save is critical.
For this reason, a detailed budget can be far more valuable than a basic budget that targets a whole.
A whole would be a budget category that includes everything under the umbrella.
When you open the umbrella, the same budget category releases the detailed budget as described above.
Detailed Budget Spreadsheet Example
I’ve been sharing our detailed budget spreadsheet created in Excel for years.
Some of you shy away because but they are user-friendly if you understand basic excel.
One of the more specific budgeting questions I’m often asked is how many budget categories are needed.
This blog is an example of how a detailed budget works compared to a bare-bones budget.
Essentially, the answer boils down to how much information you want to learn about your spending habits?
Below is a photo of our detailed monthly budget taken from our excel spreadsheet in June 2021.
Let’s look at the membership, clubs and sports budget category as an example.
The only expense for this category is for our son’s soccer and in the past baseball, skating and swimming lessons.
We’ve never detailed this budget category since there is not much to detail.
However, if you have multiple children or adults who belong to clubs, it would be beneficial to add sub-categories.
This also makes it easier to plan next year’s budget when you can tally up the numbers at the end of the year.
Little Johnny spent $1000 on soccer, baseball and hockey, all due on various dates of the year.
Soccer is due in May; Hockey is due in October, and Baseball is due in March.
The detail is essential to save money before the expense is due.
Mom and dad spend $500 on a gym membership each or $1000 a year due on June 1.
This means that we need to save approximately $1500 a year in projected expenses.
Be mindful of the dates of each expense, so you correctly set up your projected costs found in our excel budget.
Certain Budgets Aren’t For Everyone
If a budget doesn’t work for you, then perhaps it’s not the proper budget.
You have to be comfortable with the budget that you choose.
You’ll know when you’ve found the right budget when you can’t wait to find out how well you’ve managed your money each month.
Over the years, I’ve shared various types of budgeting styles and templates on this blog.
- Bare Bones Budget (this is the budget that you can use online and print at the end of the month or print it and use a pencil and eraser to tally your debts and expenses.
- Excel Budget Spreadsheet (this is the excel budget spreadsheet that is used as-is)
- Detailed Budget Excel Spreadsheet (this is the one you have the authority to change as needed)
- Cash Money Jars is more of a method of spending and saving that is visual and used successfully.
- Envelope Budgeting System is also a visual type of budgeting and when the money is gone, it’s gone.
- Budgeting Apps are great for people who enjoy mobile technology based budgeting
Modifying A Detailed Budget As We Age
The detailed budget is probably the last budget we will ever need because it fulfils our needs.
Although there will undoubtedly be a switch to a simple budget as we age, especially if one of us is in a nursing home or long-term care facility.
This means that a budget doesn’t last forever, and it has to be updated by the user.
It’s not a set it and forget it type of system because income changes, debt increases or decreases etc.
Taking the time with any budget to make modifications is not only valuable; it’s critical to budgeting success.
For the most part, I feel that people give up on budgeting not because the budget fails but because they fail the budget.
It has given us the freedom of not owing money to anyone and to boost our investment savings.
So, if you find that a budget you’re working with is not jiving with you, try another one.
Discussion: Would a detailed budget work for you, and what types of budget have you tried and what did not work out?
Share your experiences below for readers who are new to budgeting or want real-life information.
Thanks for reading CBB Friends,
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