You’re ready to see a change in your financial life. Welcome to budgeting for beginners – the ultimate guide to get you started!
I’ve been there. I see you. And most importantly, I understand you!
Coming to the realization that you need to take control over your money, is no easy decision. That’s why I’ve created budgeting for beginners to help you conquer that choice, at your own pace!
You’ve made the decision to change your habits, I assume that’s why you’re here! And luckily for you, creating a monthly budget is actually super simple! And I’m going to show you how!
Step 1: Get Organized
We need to gather all the things to make us successful in setting up a budget! Being prepared is key and below are the things you’ll need to get started!
Check List of Materials you’ll Need
- 30 days worth of transactions from your bank statement
- 3-5 Highlighters – the more the merrier!
- A calendar for reference
- A budget template! (see below for some freebies!)
Step 2: List your Income
Here comes the easy part! List your income based on the image below. If you have a regularly tracked income, let’s say salary based, enter in that number in!
However, if you’re unsure of your income, look back from previous income streams to estimate it. The lower you estimate your income, the higher results you may see from your budget at the end of the month!
Step 3: Add in Budget Line Items and Estimate Expenses
Calling all the money nerds, this is my favorite part!
First start by categorizing your expenses. You can either get super specific or keep it general, it’s totally up to preference! Personally, I like to get down to the nitty gritty and get specific. It’s allowed me to really track where all my money is going, down to the cent! List out those categories based on the image below.
TIP: Use your highlighters to categorize your transactions in your bank statement!
The main part of setting up your budget is figuring out how much you are going to be spending. It’s extremely important to be realistic when estimating your expenses! The last thing you want while budgeting is to get discouraged, so make sure that whatever number you need for that category is feasible for yourself. No one else is seeing this budget – be as honest and real as you can!
Step 4: Entering Actual Expenses
This is where your calculator comes in handy! At the end of the month (or during a budget check-in), we want to add in the actual amounts that we spent for each of our categories. This will give us the absolute proof of where our money is actually going!
You may find that in some categories, you’re overspending in or just hit the mark! And guess what? That’s totally okay! As I mentioned before, don’t get discouraged by this part. We’re beginning to learn our money habits, and believe me, this is soooo good!
Once you know where your money is going, you can start to tweek your budget that works for YOU! Or if you’re completely shocked by these numbers (like I have been so many times!), you can begin to make changes!
Step 5: Set a Budget Check-In Date
One of the best ways to keep your money in your control is to set a budget check-in date with yourself! Even if you’re not a beginner at budgeting, many people forget this vital part of budgeting. It’s honestly half the battle!
Remember, this is budgeting for beginners!! It will take at least two months for you to really start feeling like you’ve got a better handle on your budget! Give yourself some grace, use this guide every month, and trust me, you’ll start seeing amazing results!