I would not say I am an expert at budgeting or finances, but I do work hard to keep our finances in order and to pay off our debt. Although it may sound strange, I enjoy budgeting and financial planning. I think this is mostly because I like a good spreadsheet (HAHA!) and I have a personality where I enjoy organization, which works well with budgeting and financial planning. Also, I am not really a big spender, so I don’t see budgeting as something restricting. I more see it as something that helps my family to be able to do the things that we enjoy.
So if you are just starting out budgeting, it is good to know about how much you make in a typical month and what bills you pay on a regular basis. If you don’t know this information, you should try using an app like mint.com (www.mint.com). This app is great for telling you where you are spending your money. Once you have figured out how much you are making and your bills, you can either use an app, such as Mint or others, for your budgeting or develop a spreadsheet. You can access a spreadsheet like I use here (Sample Budget). This spreadsheet has built in calculations so once you begin to enter data, you will see it start to calculate your totals.
On this spreadsheet you will enter your projected salary amounts and then all your bills in the projected bill amounts. Once you have entered all your bills, you will be able to see how much money you have left over. If you don’t really have any money left over then you are done with your budget or you might consider ways to lower some of your bills so you can have extra money for other spending. Don’t forget to include the amounts you spend on groceries, eating out, gas, and any other regular expenses you might have (gym, hair, nails, etc.). If you have excess money after your budgeting, you could use this money for savings, spending, or paying off debt. On my spreadsheet there is also a recommended spending calculator. It is recommended that you spend 70% of your money on essentials, 15% on general spending (eating out, shopping, nails, hair), and 15% on savings. I try to keep my spending close to these numbers, but I haven’t been able to get there yet. 🙂
You can decide how to keep track of your spending. I personally use different accounts to make sure we stick to our budgets, but you could also consider the envelope method. The envelope method is featured by Dave Ramsey and you can look it up online. If you are single, you might be able to put all your spending, grocery, restaurant and gas into one account for spending. I find separate accounts or envelopes easier to track spending so I don’t over spend on personal items that I don’t really need.
These steps should get you started on the right track. You can also check out some of our other financial management posts for easy ways to get your finances together.
What methods do you use for financial management?