Budgeting has a bad reputation-it can be perceived as difficult, unnecessary, cumbersome, and annoying (I’m sure you can toss a few more words at me too!) However, whether you want to admit it or not, you need it! You can’t be financially responsible without a plan. I’m going to walk you through 10 EASY steps for starting a budget, so don’t wait any longer.
Just knock…I think you should knock.
Olaf’s wise words to Anna as she hesitates in front of her older sister’s door. I know that you know this movie; I don’t have to explain further, right?
We’ve been singing the lyrics of Frozen for years now…and now Frozen 2.
This same advice is true when starting a budgeting. Well, not the knocking per se – but one simple action at a time.
I’m going to break it down for you, step by step. There really are 10 simple steps for starting a budget, but when putting it all together will take an afternoon or evening of time commitment. However, do you know what those few hours could bring you? The start of a lifetime of financial progress, and one step at a time to meet your goals.
Take a deep breath-it’s not going to be as hard as it sounds.
You really can do this-you can do hard things. If you can do one or more of these tasks listed next, you can do this.
Have you birthed a baby?
Are you responsible for children in ANY capacity? Feeding? Watering? Bathing?
Do you have to be around grown ups for any length of time during the day? Even virtually…
Can you make a meal that doesn’t come out of a box?
Think about WHY you’re doing this.
Why is it important to you to keep tabs on your money, and become intentional?
What’s going to keep you from saying screw it the first time the math doesn’t add up? Your kids? Is it youur goals? Your future?
Decide the method to your madness.
Do you like spreadsheets? Notepads? Phone App?
Write down all of your income (all of it).
When do you get your paychecks-how often, and how much? Do you get alimony? Child support? Add it in. Do you have a side hustle? Bonus checks? All of this is important, and income you have coming in!
Next up, gather up your credit card statements.
Open up your banking app, and start reviewing your expenses-ALL of them. Start with the obvious, like rent/mortgage, utilities, transportation, and food to the less obvious, like periodic gift giving, entertainment, AAA membership, auto repair, oil changes, beauty expenses, and beer. Don’t forget any payments you make on a monthly basis as well.
Categorize your expenses.
This is how much you want to allocate for these items monthly, or quarterly, etc. i.e. $600 in groceries, and $50 for gifts.
Get your monthly income down.
Make sure to put your total income for the month at the top of your paper, spreadsheet, napkin, etc. (whatever you choose to use). You definitely need to know what this number is.
List your categories and expenses amounts.
Think of everything you’re spending money on each month-don’t leave anything out! It’s ok if you forget something initially (this takes time after all, especially when you’re first starting out), but take some time to do this.
Take your income, minus your expenses.
What do you have left over?
- If you have extra, I want you to put that money toward your goal. Maybe it’s an emergency fund, debt payoff, or a tiny home (shrug).
- If you don’t have enough to cover your expenses, circle back around and see what you can trim up to make the math work.
Your goal is to spend ‘every dollar’ of your income.
If you do have extra, that money surplus is going to your goal. If you’re too tight, find out where you can trim, and/or how you can boost your income.
Now, I’m pausing for a moment to shamelessly plug my very own budget video training series. Seriously, it has everything you need to start your budget, keep it updated, and really flourish! This is what I use in my personal budget, and how I help clients craft their budgets.
Check out the Budget Video Training Series; a really low cost way to DIY your budget with a little bit of video instruction help from me. Grab it now at the low cost of $48 before the price nearly doubles and lands on a new platform. P.S. Once you purchase you always get the new version updates too!
My recent conversation and podcast guest appearance.
I had a very similar conversation about getting started with budgeting with Erica Arsenault, host of The Rising Podcast recently. She asked some really great questions, like:
- How has your past experience with money shaped the way you model personal finances for your children?
- What emotions do you see tied to money that hold us back from taking control of our financial health?
- What is the first step to taking control of your money when you are ‘going in blind’? (i.e.: haven’t looked at income or expenses, just know that your credit card hasn’t been declined yet.)
Listen in on our conversation here; it’s easier than you think to keep it simple, and just get started.
014 Sarah VanHoose on Personal Finance and Budgeting Basics
We had a great convo talking about all things money. Check Erica out, she’s doing her own weekly podcast, and has a variety of topics and tools for Moms especially. She’s entertaining and transparent-I love a Momma out there keeping it real!
If you’re ready to get started with your budget, don’t wait any longer. It’s time to take control of your money.
Want to talk more about how to get started? Send me an email so we can chat further. [email protected]
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