HOW TO START A BUDGET

Budgeting. Not exactly a sexy word, right? But knowing how to start a budget can move you where you want to be in life.

Not having a budget will keep you stuck right where you are at.

I have been pretty good at budgeting for a long time. Back when I was married my husband was a contractor which meant we had very good financial times and lean times throughout the year. I learned to avoid spending everything we made to make space for the lean times.

I also learned to get as much out of a dollar as I could. We had 5 kids at home and we needed to stretch our money.

Budgeting and making the most of my money is a bit of super-power you mine, you might say.

Download your free budget worksheet by scrolling below!

This biggest hurdle in budgeting is simply getting started.

And that is where I can help you.

Check out my post on decorating on a budget!

There are FIVE things to have to do to create a monthly budget. None of them are hard, but you do need to take the time to do them AND you need to be honest with yourself. All of us have some bad money habits that need tweaking.

For me, I have recently stopped all impulse purchases online. If I want something online I give myself at least 24 hours before making the purchase. And about 75% of the time, after the 24 hours I don’t want that item anymore.

And right there, I am saving money.

Let’s get to creating our monthly budget!

SIMPLE BUDGET PLAN

How much money comes in each month? I want you to take out a piece of paper or make a spreadsheet. Either way work just fine. Write down all of your income sources, no matter how small. You will add salary paychecks, money you earn from a side hustle, spousal or child support, monthly income from investments, and any other income that comes in each month. If you only have one income stream from your day job, no problem. All you need to come up with is a total income for your household.
How much money goes out each month? Think about this part of making your budget. You will write down all of the obvious things like your mortgage, grocery expenses, basic expenses like shampoo and dog food, utility costs, credit card payments, insurance payments, car payments, and anything you pay for to run your household each month. Now you are going to write down the extras. Do not write those next to your basic expenses. Put them on a separate sheet of paper. Write down cable payments, clothing expenses, school costs, entertainment expenses, and anything else that comes up each month. You will also need to write down expenses that come up quarterly or yearly such as car registration or property tax.
Do these numbers match up? You will need to compare the amount of money that comes in each month with the amount of money that goes out. If the amount of money that goes out is bigger than the amount that comes in, you will need to take a hard look at your expenses to trim the fat. I have included lots of ways to do this below. It is not as hard as you might think. There is no way to have an effective budget by spending more than you make. The changes you make to fix this will reap big rewards in your future…so do not back away from it!
Create your monthly budget. Track all of your regular expenses on a sheet of paper or spreadsheet. Leave a space for checking off when it is paid. Any bills with amounts that change each month can be averaged out. Keep any excess in your account for those months when the bills are higher. Average out quarterly or yearly expenses so that you can save for them each month. This makes the large bill that comes in doable.
Set future financial goals. Write it all down! How much do you want in savings? Do you want to save for a big vacation? What about increasing your retirement income of your investments? Once you get the monthly budget situated you can start working towards you future plans and dreams!

FREE MONTHLY BUDGET WORKSHEET

I have created a useful budgeting worksheet for you to use as you plan your budget. You can download it by signing up for my newsletter below:

Ideas For Getting Your Expenses Lower Than Your Income

This is where things can get sticky. It is the space where a lot of people decide to give up and continue to work without a budget. BUT this is the space where you need to dig and make changes. Generally, huge changes are not needed. Take the time to be realistic about your spending and be open to doing things differently.

This will help you to achieve your goals and find yourself in a better financial space at this time next year.

Keep in mind that you do not need to do everything listed. Most of the time, picking a couple of things to change will be enough. Here are several areas to look for more money:

Cable TV Do you NEED cable? What do you use it for? News? TV shows? Football season? Keep in mind that you can get the news online. You can watch TV shows on Netflix. And you can keep cable only for the months football is on. You will save a decent amount of money just getting rid of cable.
Cell Phone Service Do you have more than you need? Most people do. It is entirely possible to scale down and still use your phone the way you want to. You just have to pay attention. Kids can be a part of this too. They can limit their usage and still live a perfectly good life (LOL!).
Workout and Exercise How much to pay each month for your gym membership? Can you start working out at home? Or running or taking walks outside? YouTube has great workout channels that are consistently updated and they are taught by qualified trainers.
Car and Auto Insurance Take some time to shop for cheaper rates. You may be surprised to find that have been overpaying for a long time.
Eating out Limit the times you eat out to once or twice a week. And stay on the less expensive side of things. You will still enjoy the convenience of it while saving money. Packing lunches for work is generally healthier than driving thru and getting fast food. Another bonus! (Check out my post on saving money at the grocery store!)
Coffee How often do you pay $5 for a cup of coffee? Learn to make your own at home and the money adds up quickly.
Entertainment Does your city host free entertainment events? I live in a small town but we have a ton of fun things to do, especially over the Spring and Summer. All you need to do is to search online for your “city name” plus “events” or “things to do”. Put some of those events on your calendar.

As you can see, setting up a simple monthly budget is not hard but it does take some effort.

Feel free to contact me with questions if you need more direction for getting started. I have more budgeting blog posts planned and they will be coming soon!

Happy budgeting, friends!

HOW TO START A BUDGET