Beginners Guide To Budgeting

 

Disclaimer: I am not an expert, i am simply sharing how I  build my budget and what works for me. This is not a strict guideline, do what works for you!

I hope this budget can help you get clarity and take the first step into financial stability!

 

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1. The first thing you need to create a budget is to calculate the fixed monthly income. If you are someone who either receives the steady amount monthly ( ex: salaried employer) this should be easy to figure out. If you don’t have a steady or reliable month to month amount, use the minimum amount that  you can expect. This should be done if you are paid commission and or tips.

 

2. Next you want to begin to determine the amount you need to sustain your lifestyle. Start off by listing each bill and the amount allotted for each. If you have a bill that fluctuates like a water or utility bill, use the greatest amount you’ve previously paid for that service.

 

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3. Next, you want to determine the amount you need for basic necessities. This includes the money needed for food, gas, toiletries and other house needs.

 

4. Delegate a monthly saving amount. Read our last blog post about tips for saving and how to get the right amount for you to save monthly here.

 

5. Keep a “Rainy Day Fund”.You never want every penny that you make accounted for! Never designate all of you money, instead leave yourself a grace of at least $50 monthly just in case an unexpected expense comes up.

 

6. Always leave something for yourself!  I emphasize this because I think it s important to be able to reward yourself for doing the right thing. Give yourself an incentive to keep working hard! My husband and I give  ourselves a “going out” budget for little things we enjoy doing like movie dates. The amount that you should give yourself is best determined on a case by case basis, so determine the best amount for you!

7. The last step is to use the numbers to calculate if you are below or over budget. Based on that finding, you may need to adjust some things. Maybe you spend too much on cable, in that instance you may need to look into cheaper internet based streaming services. Maybe your phone bill is really high, you may need to downgrade or switch services. Maybe your car note is killing you, if you have been consistently paying on time for a while, you may be able to seek another loan at another credit union for a lower interest rate. Maybe you spend a lot of grocery shopping, read our blog post about How To Save Money on Food While Eating Healthy at the Same Time! Whatever, the case may be, it is important to be aware .

 

 

Let me know if you found anything on this list helpful. Did I leave anything out, help other by commenting below! Thanks so much for reading.

 

Why you’re not saving as much money as you should be!

 

There are plenty of reasons to save. You can save for a short term goal, save for unexpected events or you can save save for long term . No matter the reason, it is important for everyone to save money, no matter the amount of money you make. Here’s some tips to help you save as much money as you can!

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  1. Make a clear goal! Many people are just saving whatever they have left after they buy everything they want and need for the month. A better method is to determine how much you want in a certain time frame. Example: To save 10,000 in 2 years you would need to save $417 a month (Rounded up from $416.66). This not only lets you know the exact amount you have to save for your goal but the exact amount you need to to have left over after you pay for all of your allotments. If you do no have the monthly amount to meet your goal, this lets you know that you need to either increase your cash flow or cut back on some of your expenses.
  2. Once you create your goal you will need to follow through. Create a savings account and create a recurring transfer to this account monthly.! You need to keep your saving separate so that you get into the habit of only spending the money you have left for spending purposes. This may mean you have to stretch your last $20 till the end of the month.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            Picture1
  3. When your making your budget be sure to give yourself some extra cash for the unexpected life occurrences. You want to leave at least $50 a month and if you have any left over, save it for the next month! This way you don’t have to keep dipping into the savings while your in the process of growing it! You will thank me when you’re prepared for that extra coolant, flat tire or any other lower cost expense
  4. Don’t forget to leave a little something for you! No struggle comes without sacrifice. To keep you motivated and inspired to work hard, I think its crucial to be able to have a small treat for yourself every now and then. You know your spending habits and what a “treat” would be for you so this exact figure should be determined by you . As long as you can afford this extra expense in your monthly budget, it will work!
  5. UPDATED! Another Tip to consider is that paying off a recurring bill does not mean free money!  That money should immediately be allotted to another bill or become a part of your savings.                                                                                                                                                                                                                                                                                                                                                                                                    I Really hope these tips will work for you! Let me know if you had an “AHA” moment or if you plan to use any of my tips!                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            Be sure to check out our blog post about saving money on groceries here!                                                                                                                                                                                                                                                                                                                                                                              Subscribe for updates on our next post about How to Create a Budget that works!