May 10, 2018
Finances! UGH!! Where do you start? You don’t need a lot of bells and whistles you don’t really understand, you just need simple. You need a simple budget for beginners with instructions that will actually work for you. OK! I’ve got that covered for you.
What are your financial goals? To get out of debt, buy a house, a new car? All of this seems so out of reach when you are living paycheck to paycheck and barely scraping by. How do you save money? Where do you start? It’s easier than you think when you have the right information in front of you.
(This post may contain affiliate links. What does that mean to you? Well, if you click on a product and make a purchase, I may receive some compensation at NO charge to you. If you want to read the boring stuff, my full disclosure can be found here.)
Even at my age, this adulting thing isn’t always fun. Especially when it comes to finances! But part of becoming an adult is taking on financial responsibilities.
I am NOT a financial guru, but I do know a few things about creating a budget and sticking to it. I figured all of this out through trial and error and a lot of life lessons. What I do works for me and I know it will work for you too!
Budget – Budget – Budget! I’m sure you’ve heard that word a million times. We all know the key to financial success is creating a budget.
But it is more than just creating a budget, sticking to your budget is the most important aspect of budgeting…and the hardest!
No matter how much you have in the bank at this moment, it’s important to start a budget. You should always have a handle on all money coming in and going out. Without this knowledge, you run the risk of overdrafts — you know, when you spend more than you have and the bank tacks on additional fees.
At one point in my life, I could write numbers down on paper until my hand was ready to fall off but I was still failing at budgeting because I didn’t have control of my spending. Can you relate to this?
I sucked at budgeting! You see, my parents NEVER talked about money and NEVER told me of the importance of being financially responsible. No one sat me down and explained how to balance a checkbook or how missing or being late on a bill payment could adversely affect my credit score. Heck…I didn’t even know I had a credit score then! I had to learn everything the hard way!
Still, although floundering at times, I managed to learn and get control of things, but then came the biggest kick in the rear that left no other option for me than to become a skilled budgeter. Yes! the dreaded D-word happened — DIVORCE! Going from two incomes to one and making that work REALLY woke me up to the concept of sticking to a budget! Although I made a consistent salary as a teacher, I didn’t have wiggle room. One extra expense had me juggling plates. By strictly budgeting, I was able to find room and relax knowing I had everything covered.
We are going to start with a basic budget…budgeting 101 so to say. When you are just starting out, my suggestion is to keep it simple…don’t make it harder than it has to be.
It all comes down to tracking your money. There are all sorts of ways to do this, but I’m a visual and pencil and paper person so of course, I’ve created a simple beginners budget worksheet for you to start with. This is the perfect budgeting tool for beginners because it is easy and uncomplicated but the best part is it’s FREE.
Using the proper tool (a fully functioning budget) to track your income and expenses; you just might see you have more than you thought.
So let’s print your beginners budget worksheet, roll up our sleeves and get to work! Just click on the button below and grab your free budget worksheet!
Before we start, I want to let you in on a little secret…the most important ingredient involved in budgeting is having the right mindset! If you don’t believe you can stick to a budget, you won’t. Really let that sink in!
You have to create your own rules and follow them. Now on to our tracking…
To create an accurate budget, you must start by calculating your total monthly income. So many people have multiple sources of income from second jobs and side hustles. We need to add all of that together to get a complete total of what is coming in…our foundation of our budget.
List all of your income on your handy budget sheet. Include ALL sources of income. This is really important so don’t leave anything out. If you have consistent pay this is easy, just write down your take-home pay from your paychecks. If you receive overtime, separate that onto another line and adjust monthly as needed. Now if you are a girl boss (or a guy boss-I don’t want to leave y’all out) and have irregular income and are unsure of what your total will be for the month, write the minimum amount you know you will make. So if you make $2500-$4000 monthly on your home-based business, list your income as $2500. This can always be adjusted. Unless your income and your bills never change (like that will ever happen), you need to remember that your budget is a changing document.
Now that you know exactly how much you are bringing in, the next step is deciding on your plan. What is your financial goal or the lifestyle you want to achieve? Are you in the market for a new car? Maybe you are hoping to buy a house or take your dream vacation. By seeing just how much money you have coming in, you can now see the lifestyle you can actually afford.
Using the budget we are creating, you can make a plan for the lifestyle you want without going into greater debt…and possibly finance the realistic lifestyle you WANT by using cash! (Now you know what I mean by realistic lifestyle…because my dream lifestyle is to travel about 250 days per year and we all know I can budget until the cows come home but probably won’t be able to afford that!) So let’s keep it real and in our means, but continue striving for that next step and dream!
If you follow Dave Ramsey you have probably heard him say something like – if you can’t afford to pay in cash, you actually can’t afford it. And that is what I know I am working on, affording my lifestyle without digging myself into debt.
If you are interested in learning more from Dave Ramsey and The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness, click below.
In my next post of this series, How to Track Your Spending and Stick to Your Budget, we are going to discuss expenses and how to actually stick to a budget as we dig even deeper into how to start a budget when you just don’t know where to start and stop living paycheck to paycheck.
If you are already following a budget let me know your tips in the comments…if you aren’t budgeting, I’d love to hear why not.