Hi everyone! So before I get into this post, I in NO way claiming that I am a professional in this the Financial field. That being said, I do have a Bachelors degree in Family Finance, so I do know a little about the subject! I’ve had a passion for finance, which people tell me is kind of weird, but I love it! And no, not the corporate kind of finance (that stuff bore’s me to tears), but helping families and couples be smart with their money makes me so happy and excited for them! I have done SO many presentations on this and this is usually what I talk about when I get people thinking about budgeting.
Have you ever gone to a store and walked out buying WAY more than you had planned? (Me EVERY time I leave target or home goods! haha). Wouldn’t it be nice to not feel guilty that you did? Not only do you not feel guilty, but you actually are extremely happy about getting these new items?? Well budgeting can help that goal! I know, I know. I don’t really love the word budgeting either. It sounds restrictive and people have associated it with negativity, BUT I like to think of it more as “Planning” rather than “budgeting”. It’s not as scary as it sounds, it’s actually fairly easy once you have a system down!
I want you to think about your goals. Now before I lose you, hang in there! This is the best part about budgeting. Goals are the reason and the motivation behind it all. We ALL have financial goals (I literally have so many! haha). For example, your goal can be to build a home that you love/raise a family in, have the opportunity to travel, have enough to retire, or to get the house boat you’ve always wanted. When you start thinking about these goals, that’s when you can start getting excited!
(SIDE NOTE: Please remember when setting your goals that they also need to be realistic to your needs and to prioritize them!)
So now you have your goal in mind let’s make it happen! The first month is super easy. I literally want you to just track your expenses. Yes, every target run, every ice cream cone, every electric bill etc. Then at the end of the month, add up all your receipts and expenses to see how much you spent. At the end of the month, this should give you a fairly good idea of how much you are spending in each category.
If you have never budgeted before, the best way to start is just with the basics. It’s important to find a way to find which budget TYPE works for you. There are a ton of methods out there to try. I’ve mostly heard of people using spread sheets, envelopes, or the ‘refrigerator” method (also previously known as the checkbook register, but I don’t know who uses this anymore! haha).
Examples:
Spread Sheet Method: (my personal favorite!) If you work best on a computer or even pen and paper, this might be for you. Excel works awesome if you like making your own categories and format it to your liking. You can also buy some pretty good computer programs for spreadsheets too!
Register Method: This might work well if you write a lot of checks or only use one bank account for all your spending. Take a regular note book or check book register and label each section for variable and fixed expenses.
Envelope Method: If you like using cash, or are more careful spending when you use cash, or have trouble writing down your purchases, this may be the the method for you. You just start by labeling envelopes for a certain expense category, then decide how much to allocate to that category. When the money is gone, it’s gone!
For me personally, I love spread sheets! I know I’m weird. But I really like to actually see the numbers and it helps me keep track of what we have or haven’t paid yet. If you can pay them all at the first of the month, I would highly recommend it. It helps to get them all paid, then you don’t have to remember all the due dates (thats what I do) which also helps your credit score later. Or you also have the option of automatic deposits which are really nice, you just have to remember to keep enough in your account! It’s really what works best for you.
I have attached a free spread sheet that I use! I really like how it adds all of your expenses and income to give you a net gain/loss at the bottom of your spreadsheet too see if you hit your goal!
Let’s review:
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- Make a goal
- Track your expenses
- Choose a budgeting method that works for you
- Make needed adjustments and keep going!
I hope this helps you get started with your own personal finance! I know this was a little broad but I think it’s just very case by case on what works for you. If you guys have any questions about budgeting just leave a comment or send me a message! I would be happy to answer any questions you guys have.
Good luck with your planning!
xo, Jamie
