One of the hardest parts of getting rolling with a budget is understanding where to put money that you’ve saved during a particular timeframe once that timeframe is over. We didn’t spend the money, but need it to be accounted for later. Budgeting and saving should go hand-in-hand, but can be confusing at times.
For example, you saved $300 for Vacation this month, but now it’s time to start the next budget and you’re not sure what to do with that money to ensure it goes toward Vacation and doesn’t get spent at the grocery store before it’s needed.
And if you’re doing this for multiple categories and have a few different savings accounts it can get very confusing quickly. Which sucks, because budgeting is very simple, but can be complicated by banks who try to make you think you’re budgeting, when in reality, you’re just looking in the rear view mirror and seeing your spending history.
Let’s start with why a budget is better than just looking at your bank statement…