Start Your Budget With These 10 Steps

Ahh the scary word, budget. It can become so overwhelming if you look too far ahead. If you don't look ahead at all you'll end up years down the road still living from paycheck to paycheck. STRESS. Ok, now that we've gotten that aside it is time to take smaller bites in starting our budgets and it will instantly become less overwhelming. 

1// Know what you make. It may seem very basic to some, but to others they may not even know how much they make in a week. Know what you're making so that you know how much you can spend. If you are paid hourly, look at your past 4-6 paychecks and average out what you make per week. If you are salaried, divide your salary by the year and figure out how much you really make per week. (Bonus tip: don't forget to take taxes and other expenses into account to make sure your number is accurate to what you're really taking home.)

2// Track yourself. See what you're spending money on now. Do you go get coffee 5+ times a week? Are you online shopping in your sleep? What does a typical week in your spending habits look like? Check your bank account or credit card statements to see where your money is going.

3// Think, am I a spender or saver? Would you rather save money for weeks on end for a larger purchase, or when you're in line at the store do the impulse items get you? Knowing if you're a saver or spender will help because it makes your mind more aware of what your priorities are for spending money.

4// What are your non-negotables. The items or things in your life that you have to spend money on. Some of those may be: rent, insurance, car payments, giving, gas, electricity, parking, food, student loans. Write a list down of what you have to spend money on each month and how much you have to spend on those items.

5// Is there anything on your nonnegotiable list that can be negotiated? Is there a different insurance company that would save you money each month? Is there a different place to park that would be cheaper? What if you walked, or took uber or lift instead of parking downtown everyday? On the flip side of that, is taking a taxi everyday to work costing way more than if you just drove?

6// Time to go back to elementary school. Take what you now know you make and subtract the non-negoatble items you just wrote down. The amount at the end of that will either be a negative or positive number. If it is a positive number, go you!, that number is what you have to work with. If that number is a negative number, then either you have to figure out a new way to lower your non-negoables or up your income. 

7// Take a step back. If you can sit down and work through all of these in a few hours, you are very impressive to me. When I go through everything in one fell swoop I feel overwhelmed. Take this moment to stand up, stretch, take a walk, make yourself a cup of coffee then come back. Money isn't the end all be all. You're taking your life back and not letting your money control you. You're making progress without even realizing it! You got this!

Now that you're back from your break let's get back to it. 

8// Plan for your future by putting some of your money towards that. There are so many different opinions on how much you save per paycheck or per month. My opinion is that the more time you give yourself to put money away the better. If I start planning for my retirement in my 20s it allows me to save for a longer period of time than if I don't start till my 30s. Starting in your 30s gives more time than your 40s. Imagine if you put 5% from your paychecks away since you were in your teens imagine how much that will add up by the time you are wanting to retire! Think through what you can realistically save and go from there.

9// That amount that you now have is what you have to play with every month. There are more detailed items that we haven't discussed in this post, but you should have a real number now that you can choose to put in certain places. What are those places? Where do you like to spend your money? This is where the fun part comes in. If you know you want to go on vacation in two months, you may need to put that money for the next few weeks in that area. If you are wanting to up your wardrobe game, maybe some of that money goes there for the next month. By knowing that you have already budgeted and aren't worried about paying rent, you can feel guilt free by spending this money!

10// Talk to someone in your life that is very good with their money! I've heard it said that the best teacher is experience, but I don't believe that it has to be an experience that you personally went through. I've learned so many great things from learning from others. You can learn from their great habits and their mistakes. 

Speaking of, what is something that you have learned from your years with money? Do you use an app that has changed the game? Did you spend all your money on a plane ticket and then couldn't enjoy the vacation because you were worried about money?