Budgeting is absolutely necessary if you want to get ahead financially. This guide to budgeting for beginners is great for those that might not be the best at tracking where and how their money is spent. I’m a firm believer that you need to track your money to best understand how you can make changes to have a positive impact on your financial standing.
How To Start Budgeting For Beginners
Budgeting for beginners can be a bit scary and overwhelming. When Julie and I got serious about our budget we started with a whiteboard and began mapping out all of our expenses. We were pretty surprised to see how much money was left over after all of our bills were paid and where that money would end up. We first used the every dollar app to help keep ourselves in check. I recommend setting up a reoccurring monthly budget. Make slight tweaks as your bills or money coming in changes. It all starts with a plan!
Where Is All Of My Money Going?
You need to track every last penny coming in and out of your accounts if you want to save. To fix a leaky pipe, you’ve got to find the leak. Think of the pipe as your bank account and the leaks are where your money shouldn’t be going. It sounds like a ton of work to track this but luckily there are some awesome free apps available to help us out. I’m currently using personal capital. It takes a bit of effort to set up but it’s great once you have all of your accounts synced. I’ve also heard good things about mint as well. If you’re good with spreadsheets you might want to create one for your budget. You can always go old school and just bust out a pen and paper! Find out what works best for you and stick with it.
Benefits Of Budgeting
There are so many reasons to begin budgeting, especially if you aren’t already budget-conscious. You will find yourself with all of your bills paid on time. Hopefully, you will put yourself in a position to increase your savings/emergency fund. Loads of stress will be lifted when you have a bit of padding in savings. Honestly, this has been a game-changer for myself and my wife. One of my biggest fears has always been losing my job. I would like to think that I’m a good employee but you just never know when you might become unemployed. Knowing you have multiple months of bills covered can be freeing. I’ve discovered that it also starts to shift your mindset!
Budgeting can help to build more trust with a spouse. Find yourself a budgeting partner! This doesn’t have to be a spouse. Try to select someone to help keep you accountable. Stress levels begin to drop as you move away from living paycheck to paycheck. You begin to see your overall financial plan and start planning for the future. Basic budgeting is very similar to goal setting. Obtaining goals and achieving goals may become a bit easier after consistently sticking to a budget. Your credit score could increase as you focus on paying down debt and staying ahead. Check out our article on the debt snowball pay-down strategy.
How To Stay On Track With Your Budget
Use your accountability partner! This can be a spouse, friend, coworker, or family member. Be sure that this person will help keep you focused! Construct your budget and stick with it. Once a budget is set, you can easily repeat it. Pick out an app and let it show you where your money is going(personal capital, mint). Make reviewing your budget part of your daily, weekly, and monthly tasks.
Small Sacrifices Lead To Big Savings With Proper Budgeting
I’m in the opinion that you shouldn’t have to sacrifice everything you enjoy at the cost of getting ahead financially. With that being said, you should create a plan and stick with it. Begin to budget everything in your life. You’ll be surprised how much you won’t miss those extravagant meals, instant gratification purchases, and frivolous expenditures when they are gone. Please do put money towards unforgettable experiences and things that you are truly passionate about. You should start to feel yourself shifting your mindset when you begin budgeting your money instead of spending it all.
What is your reason for wanting to create a budget?
Hi, I’m Richard. I’m passionate about figuring out how to make my money work for me and getting outdoors into mother nature.