‘I owe I owe it's off to work I go.' Is that the song you sing when you are headed off to work everyday? Are you working to pay off the bills? Or are you working so you can save and buy fun things for yourself and your family like a new-to-you car, vacation, new sofa, or maybe even a house.
Now, a budget is one of the most important things you can have for yourself and your family. Setting up and using a budget has many benefits. Why do I say that? For many reasons. Here are just a few:
All of those sound great, right? Just not sure how to make a monthly budget or where to begin? Let's start with…
Your monthly budget is really just a plan for your money. Every dollar. Every month. When you create a monthly budget, you tell your money where to go so never again you have to wonder where it went.
Ever have $20 in your wallet and at the end of the week it is gone? And, you have NO idea what you spent it on? Yes, you might be able to recall about $17.50 that you spent…the remaining $2.50 is lost forever. That is why a budget is so important. NO more lost money.
1). Gather your checkbooks, bank statements, credit card statements, loan payments, and any receipts you might have laying around the house.
2). Create a category list. I.e. car gas, rent/mortgage, groceries, hair cuts, manicure/pedicure, kids activities, utilities (you can break them up into electric, gas, water, trash, sewer if you want), car maintenance, home repairs, etc. You can use a separate sheet of paper for each category or make columns on a sheet of paper. Whichever is easiest for you.
3). Go through every line item on your statements for the last 30 days. Write those expenses under the appropriate category in #2 above. There will fixed expenses (things that don't change from month to month like your mortgage) and variable expenses (things that are different each month like your utilities).
4). Add each category up. That total represents what you might typically spend every month in a certain area.
5). Add all of the categories to get a grand total of expenses.
1). Look at your paychecks and add up the total income AFTER taxes, 401K, medical, and retirement have been taken out.
2). Add that all up.
3). That is the total amount of money available to you each month to spend.
1). Positive number? You are in great shape! You are spending less than you earn and can take that extra money and put it in savings. Woohoo!
2). Negative number? You are spending more than you earn. NOT what you need to be doing. So, before you can create a monthly budget that works….you need to look at each of those category totals and subtract from them…until you have a ZERO balance, meaning: income – expenses = zero.
3). Zero balance? Good for you. You are not spending more than you earn BUT are you saving any money at all? If not, some adjustments will need to be made there too. You need an emergency fund and a repair fund and save money for retirement.
1). Determine your budget goals. Want to pay off debt fast? Save for something new? Stop spending more than you earn?
2). Once your goals are established look at your expenses. Are your expenses in line with your income? are you spending more than you earn?
3). Figure out where you can cut back on your expenses. Most likely you will need to cut back in order to meet your budget goals.
Now, I know that sounds very simplistic…and it is. That is really all there is to it as it pertains to numbers; paper and a pencil.
But what about the emotional side of things? How do you stop buying things on Amazon, pay off those credit card bills, or say no to your kids? How do you get your budget on track AND stick to it.
The goals that you establish will be a HUGE factor in your stick and stay. Your ‘how bad to you want it's' will factor in here as well. One other thing…if you are married, BOTH partners need to be on the same page. Meaning, they both want the same things. Otherwise it is an almost impossible task.
I know that budgets are hard at first. But, I promise, as you plug along each month and find that you are no longer spending more than you earn, that you are paying off bills, and maybe your emergency fund has money in it….you will be so motivated that nothing will stand in your way!
Grab your FREE Budget plan today!
Got ya covered right here:
And when stress sets in it is sometimes difficult to be happy or joyful, right? So, don’t let stress have the last word!
Go on and take a look at the top 5 Stress Reducers (Action Plan included). So that you can eliminate what causes you stress and get on the path of living a joyful life.
Joyful Living is ALL about not letting let the circumstances of YOUR life determine who you really are. You learn to choose YOU instead! Not sure how to do that? Let me help!
To begin, go ahead and read: