So, you want a budget, but you want it to be simple and you have absolutely no idea how to get started… This is for you. You must conquer budgeting because it is the key to your financial success.
Let’s dig into how to start a super simple, basic budget for you and your family. We will take this step-by-step beginner style, so you have everything you need to get started.
1. Write down all your expenses.
Seriously, just write them all down. Bam! Even if it hurts, write. If you don’t have a clue, just start. Find any bills you’ve paid in the last month and write those down. Sounds easy enough…
Then estimate what you think you spend in categories that are little harder to look up. Areas like groceries, gas, and miscellanies stuff..
Now, one more challenge, brainstorm any bill that you foresee coming in the next year. The kind that are not a surprise. Like taxes, insurance that is paid annually/biannually, and subscriptions (example if you have an annual tax bill take your total and divide by 12 to figure out how much you spend monthly). Write those down too.
2. Add up any income.
Now that you have begun to track expenses, it’s time to add up your income. Any money that comes in paychecks, tips, salary… Write them down.
3. Choose an app to use or decide to use paper to track things.
Now is the fun part. It’s time to plug all that info in so we can see where we are at. What’s your favorite way to record information? There are great budgeting apps, paper is always an option, or even a spreadsheet would work.
For a beginner I would start with the Every Dollar app if you are comfortable using a smartphone, if not, go with paper to start. For the Every Dollar app, you can use the free version with no need to purchase anything (for real). It is very user friendly, plus if you are married it works well because both spouses can use the same login info so you can both be up to date with the budget on a daily basis.
Now, plug in all the info that you collected. Here is when you find out where you are at. Which is higher, your expenses or your income? Moving forward your goal will be to make this balance out.
4. Start tracking how much you spend on everything.
Moving forward, as you budget monthly, you will have some challenges.
It is tricky to figure out what you spend on all the random expenses and groceries. Food is tough. Usually we spend way more than we think we do. But it’s time to face it.
Starting today, start tracking every penny that goes out. I mean it, every penny.
A month from now, you will know exactly how much you spent last month. Imagine, you will know where your money went. That’s a little exciting to me. I like to be in control. So, knowing where my money goes makes me feel like I have a grip on what is going on my own life. I like that.
5. Plan before you spend.
Now, moving forward, you will create a guide, an estimate, of how much you expect to spend in every area for the next month. This is your budget.
Now, at least every week, you need to do a budget check. Fill in exactly how much you’ve spent in every area and check that against what you had planned for the month. The more often you do this check, the more in touch you will be with where you are at financially and the more successful you will be.
Make sure you have a plan before you spend the money. This is the beginning of the rest of your financial journey.
You can do this.
Budgeting is not impossible. It is hard to start with, but it gets easier and it is worth it. You can do this. It will be worth it.
