Finances… also known as Budgeting…
Did I just see you cringe?!
It’s ok, my husband still cringes after 6 years of marriage and I mention the word “budget”.
Let me tell you, we have come a LONG way from first being married with enough money for all that we want, to 3 kids later, one working dad and a stay at home mom trying to make things work. So, let me help you with this and tell you what we’ve learned.
Where do I start?
You have already started. Right now, reading this post. You are becoming more aware and acknowledging that you need to change something in your finances.
Now, go get your significant other if you have one, and sit down for a few minutes together. I need you to do a few things.
1. Write down financial goals
Goals? For my finances? What would those be? Let me give you some ideas…
- pay off all credit cards
- pay off student loans
- get out of debt
- learn where our money is going
- put money into savings
- save for a down payment for our next car
- go on an awesome vacation out of country with cash
Are your creative juices running yet? Kept going, and write down any goal related to money you can think about. The more the better, it means you are getting involved and serous about this soon to be change in your finances.
2. Pick one goal
Pick one goal to focus on. Not 2 or 3! If you are just getting started in trying to figure out finances and budgeting, I only want you to start with one goal.
The reason behind this is simple: if you have one goal, it’s easy to accomplish. You feel good for accomplishing it. This will then hopefully start a snow ball… you’ll get excited about finishing it, pick another one, and keep that ball rolling.
Before you know it, you’ll be making more goals and realizing how much you really can do with a… budget. WAIT! We aren’t budgeting yet! Don’t leave! We’ll, you can leave, but keep the next step, #3 in mind. Then we’ll sit down and talk about that “b” word later.
3. Start noticing
Take a week, or a month, and start looking noticing what you are doing with your money.
Is there something you buy every day? Do you impulse buy a lot? Read How to Stop Recreational Shopping.
What are some “high priced items” you tend to consistently buy.
How much do you spend grocery shopping each week, or do you go grocery shopping more than once a week?
Do you spend a lot on entertainment?
Are you putting money into savings?
Do you use cash or credit card? Or do you prefer to use debit card?
How often do you look at your bank accounts?
Start becoming aware of money and aware of prices, and this will lead us to the next step.
4. Write down your spending
There are so many ways to do this! The most popular is Mint. My personal favorite is Money Trackin. There are excel sheets, and all kinds of apps you can use on your phone or desk top to keep track of you money.
It is something you NEED to do! For one month, you need to write down everything what you are spending money on. It might seem tricky, but you’ll find a way that’s easy for you. In my house, my husband used to give me receipts… until they would get lost. Instead, I find the easiest way is to look at my bank and credit card accounts and see what gets taken out… I then input this into my Money Trackin website for easy use.
Now that you have noticed what you spend your money on… and you have written down for a month what you have spend your money on… it’s time to look at the data and create a budget.
Make sure you keep your significant other involved in the budget aspect. If you do all the creating, just make sure you run it over with them so they are aware too and have some responsibility. It will make life so much easier with you both on the same page! Here is a good read on the Top Items You Should Budget.
6. Manage budget and make changes
Last by not least… managing your budget, and making changes. Each month, go over what you made and what you spent. Now, compare. How did you do? Did you keep within your set budget? Go WAY over in some areas? Read What to do if you go Over Budget.
I recommend trying to stick to your set budget for 2-3 months. After a few months, if you see that you are consistently over or under in some areas, then make some changes.
If you are still having trouble making ends meet, check out this post for 8 tips! Or if you are looking to get a jump start to tackling your debt read how to get ahead financially using your tax refund OR How to Make Easy Money Fast.
Having trouble figuring out why you are over budget? Read 8 reasons why you are over budget and how to fix them.
Finances and budgets are hard, but you can do this! I KNOW you can!
I would love to know how I can help you! I’m not going to say I am a pro at this finance thing, but we have definitely had some experiences. It’s important to be aware of your finances so you can prepare for emergencies and the unforeseen future.