Should I Set up a Weekly, Monthly, or Yearly Budget?

To travel on a budget, first you have to have a budget.

When I was in college, I took a family finance class.

The class was awesome and the professor was great, but a little old-school.

For example, he recommended having a printed copy of your budget on the fridge and updating it by pencil with each transaction so that you have a regular visual of where your spending is at.

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I get the logic behind that, and maybe that works for some people, but it didn’t for me. I much prefer doing my budget digitally (but that’s another post altogether).

Not One-Size-Fits-All

Another method he recommended that didn’t work for me was this: making your budget a monthly budget.

I tried that, but here was the problem:

At the time, we got paid every other week.

Plus, with our paid-by-the-hour student jobs, our income wasn’t perfectly consistent from one paycheck to the next.

So when I tried planning a monthly budget, I was really just having to guess how much we’d be making for that whole month.

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But too often my projections for how much we’d earn and would be able to spend didn’t match up with reality, so the budget basically became useless.

So here’s what we learned and recommend:

Base Your Budget Style On Your Pay Schedule

If you get paid weekly, make a weekly budget; if you get paid monthly, use a monthly budget.

It makes so much more sense to budget with the money you actually know you have, instead of just randomly guessing how much you might have for the whole month.

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Then look ahead at what you have going on within that time period—bills due, baby showers to attend, birthday gifts to buy—and budget accordingly.

I have found budgeting this way to be so much more effective and useful.

What about a Yearly Budget?

If you do have a predictable budget, I think it’s wise to plan a yearly budget as well.

A yearly budget better allows you to prepare and save for expenses down the road—and I mean that both metaphorically and literally. Because, hopefully, having a yearly budget will help you better be able to save up to travel.

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Why?

Well, it helps you keep the big picture in mind.

If you use only a budget for each pay period instead of for the whole year, it’s easier to say,

“Hey look! I’ve got a little extra money here after budgeting the rest to bills and all the necessities! Woohoo! I’m going to stop and grab some fast food!”

Or rent a movie. Or buy some trinket. Or whatever else you don’t really need—instead of putting it towards traveling.

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But when you’re keeping the goal of your trip(s) in mind with a yearly budget, you will remember to set aside the amount you need to allot each pay period in order to reach your goal and the cost of your trip(s).

Patience Is a Virtue

If you’re just first getting started with this Fernweh lifestyle, it might take some time and patience before you can save up enough for your trip goal.

That especially depends on how big your income is compared to how big your trip goal is.

Maybe you won’t be able to save enough this year (though you very well could!), but I bet if you budget and save diligently this year, you could totally go into next year’s yearly budget with plenty of confidence and moolah to plan and take that trip.

One thought on “Should I Set up a Weekly, Monthly, or Yearly Budget?

  1. Pingback: When’s the Best Time to Start Planning a Trip? – Fernweh Familie

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