Personal Budgeting for the Beginner
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Examples of discretionary expenses include entertainment, dining out, gifts, vacations, personal care, and clothes.
These are costs that can be adjusted based on what you can afford. Notice that they come after your fixed expenses and financial goals. If you get a positive number , this means you make more money than you spend woohoo. Now, you can go back to your budget and adjust your numbers if you need to.
For example, maybe you have a surplus of several hundred dollars. You could put more into savings or put more toward your debt pay off. If you break even , this means you have exactly enough money, but no margin. If your number is negative, adjust your budget by decreasing some of your discretionary expenses or find a way to increase your income.
How to Create a Monthly Budget That Works
A way to decrease your discretionary expenses is to spend less on entertainment, dining out, or other non-essential things. Make sure your financial goals are being met before spending on discretionary items. Whatever your number, there is power in knowing. All you have left is monitoring and adjusting things.
Finally, you need to implement, monitor, and adjust your budget according to how your life plays out. I set aside an hour Saturday morning to look at my accounts and make any changes to my budget. The important point is to check in regularly. This will help you implement your plan and stay on track. As you monitor your budget, reflect on the process, and make changes as needed, keep going and let your budget be the system that helps you achieve financial success.
I recommend taking a budgeting course, like Budgeting For Budget Haters. For more on learning how to budget, visit my Ultimate Budgeting Guide. Natalie designed her dream life, and her goal is to help you design yours. My one tip would be to actually track your spending for the first month. Your guess how much you usually spend on things will probably be off!
MAKE CHANGES TO YOUR BUDGET
Even though at that time I was making an OK living, I still could be so much father ahead than I am now for things like retirement and other savings goals. Oh and yes I now for sure budget. I hear you, Tonya!
I wish I started in my teens! Better late than never! Just be honest with yourself about your spending and true income. Once you know where your income and spending is at and adjust to get spending below income you are on your way. That tip is more helpful than one might think. I have to be very honest with my spending and careful with my budget, paying closer attention to clothes shopping than the average person.
This post actually gave me an idea for how I can easily add a budget portion into our spreadsheet. Then I can pivot off of it and automatically calculate the difference. Hmmmm this just might work out well for us.
How To Create A Budget: A 6-step Guide
Thanks for the post and getting me thinking about budgeting! Our philosophy was always save, pay bills and spend the rest. Thanks for the inspiration!! Sarah recently posted… November goals. Yea, now that I budget I realize my misc. For example, one time my local newspaper double-charged me for my subscription to the paper the subscription auto-renews every six months. I knew the number looked odd because I had been tracking the expense. If you are living within your means already and simply want to understand how a budget helps, the extra little expenses may not be as tough for you to manage, but you do need to be able to understand that your income should be primarily dedicated to the necessities.
Ideally, your budget will reflect a balance leftover each month after all of your expenses that can then be used to pay down debt and save for the future. I also recommend the concept of paying yourself first. This will help you to continue to build your savings account and eliminate unnecessary expenses. Adjust your monthly expenses to match your income. Budgeting for beginners is all about understanding how your money works for you. After you have listed all of your income and expenses and find that you are either living within or outside your means, it is time to adjust your monthly expenses to make the most of your income.
By using simple tools like living more frugally, or adding an extra source of income, you can easily create a budget surplus that can pay off your debt and put more money into your savings accounts. After you have taken a look at all of your income and expenses you may be considering adding extra money so that you can begin to save more each month. Check out these 20 Ways to Make More Money.
- Beginner’s guide to managing your money.
- Budgeting for Beginners: A Practical Guide to Get Started.
- Benjamin Britten (Kindle Single) (Penguin Specials).
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Budgeting for beginners is all about learning to understand how income and expenses work for your family. By putting things on paper, or within a spreadsheet to easily look at, you can make it simple to adjust and focus your income toward debt and savings for the future. This is a great post.
As you noted a great way to do that is to record your expenses and income. When I first created my budget I started by looking at my expenses and income for the previous month. I have tried several times to get you budget binder worksheets and it is automatically sending me back to the homepage without sending my forms. Hi Casey, I can see the email with the budget binder was sent to you on July 22nd, the subject title of the email is: I got the email saying that I have access to the budget binder but I cant get it anywhere!