Financial stability is the cornerstone of everything we want to accomplish. Whether it’s saving for a dream vacation, paying off debt, or simply living with less stress, understanding where you are financially—even if it’s not where you’d like to be—is the first step to moving forward. Here’s how tracking your spending, budgeting intentionally, and planning thoughtfully can transform your finances.

Start With Clarity: Track Your Spending

Knowing exactly where your money is going is powerful. As Peter Drucker famously said, “What gets measured, gets managed.” By tracking your spending, you take the guesswork out of your finances. It can be eye-opening to see the patterns that emerge.

For example, when I reviewed our December spending, I realized we had spent hundreds of dollars on food delivery. It was a stressful and busy month, and cooking fell by the wayside. This insight taught me that during overwhelming times, we need an intentional plan to prevent unnecessary expenses. This month, I’m focusing on creating a list of easy meals (like dump-and-go Instant Pot recipes) and building a freezer stash to help us stay on track, even during hectic seasons.

Create a Budget That Reflects Your Goals

Once you know where your money has been going, you can plan where you want it to go. A budget aligns your spending with your priorities. Here’s how I approach budgeting:

1. Break It Down by Categories: Keep it simple with four main categories:
   • Debts (mortgage, escrow, car payments)
   • Regular Expenses (daycare, food, transportation, medical bills)
   • Discretionary Spending (fun spending for family members, gifts, pets, and miscellaneous items)
   • Non-Regular Expenses (car insurance, planned travel, house maintenance, and other irregular costs)
   Simplicity helps avoid overwhelm and makes it easier to stay consistent.
2. Set Realistic Goals: Our goal is to save or invest 30% of our income each month. Right now, we’re at 22%, up from 5% over a year of adjusting our budget. It’s a work in progress, and that’s okay! Regular expenses make up about 60% of our budget currently, though we aim to bring it down to 50%.
3. Customize for Your Family: Discretionary spending is unique for every family. For us, each family member (including our pups!) has a dedicated line in our budget. This method keeps things fair and clear, while also leaving room for the occasional birthday gift or forgotten miscellaneous expense.

Plan Ahead for the Year

To truly take control, consider mapping out a yearly budget broken into months. This allows you to anticipate upcoming expenses and smooth out irregular costs. For instance, I pulled all our utility expenses from the previous year to estimate our 2025 budget. From there, I added estimates for other recurring expenses like groceries, daycare, and transportation.

Planning ahead doesn’t mean every detail will be perfect. Life changes, and so will your budget. But having a roadmap gives you a starting point to adjust as needed.

Tips for Staying on Track

• Embrace Flexibility: A budget isn’t set in stone. It’s a tool that evolves with your life and priorities.
• Build in Buffers: Overestimate slightly for irregular expenses so you’re prepared for surprises.
• Celebrate Progress: Even small wins, like increasing your savings rate by a percentage point, are worth celebrating.

Final Thoughts

Building financial stability is a journey, not a sprint. By tracking your spending, creating a budget that aligns with your goals, and planning ahead, you’ll set yourself up for long-term success. Remember, it’s not about perfection; it’s about progress. With time and intentionality, you’ll get closer to the financial life you envision for yourself and your family.