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How to Start a Budget the Easy Painless Way – Even if you suck with money, you don’t have to be afraid of starting a budget! I promise… you can do it!
I know, I know… everybody hates talking about budgets. They’re a pain, they’re not fun, they really restrict you a lot.
I know. I really do.
But honestly, the initial annoyance is totally worth all of the benefits that come from living on a budget.
If you are like more than half of our country you don’t have a budget. And if you do, you don’t stick to it.
Why? Because budgets aren’t fun.
When something isn’t fun, you don’t do it. When you feel like you stink at something, you don’t do it anymore.
Do you know what is even less fun than trying to work on a budget? Not having any money. Not having any kind of financial stability. Or not knowing how you’re going to make it to the next paycheck.
Maybe you don’t know how you going to get enough money at the end of the month or your mortgage. These are all scary but very real situations that can all be worked through if you were able to make a budget work.
So let’s talk reality for a second. You stink at budgeting. But that doesn’t mean that you always have to stink at budgeting. There is hope!
Related Post: How to Live on One Low Income
I used to stink at budgeting, too.
I used to make these ridiculous budgets that cut all of my expenses down to 25% of what we were actually spending. Not surprisingly we couldn’t stick to those budgets, the budgets “failed,” and then I gave up trying to budget again.
In reality, I had just never found anybody who was able to speak to me as a person about my personal financial situation. A lot of the people who were making these budgets were talking about their $5,000 a week income and I just couldn’t really do that. And all that did was make me more depressed.
I’m here to help you learn how to start a budget the easy painless way.
But before we get started, I want to share with you guys some real facts about budgeting:
- Your first budget will likely fail. But that does not mean that you are a failure and it doesn’t mean that you suck at budgeting. It just means that your first budget didn’t work for you. And that’s okay! Simply put a new one together and see if it’ll work better for you.
- This might make you feel a little bit depressed. That’s okay! That’s totally normal too! This is a really intimate assessment of your relationship with money and it might reveal a lot of things about your financial situation that you have been trying to avoid.
- It will only get better from here. Your relationship with money will only get better from here. This is the first day that you are really taking the time to learn about your finances. Your situation might currently be awful but it will only get better from here.
- Don’t stop. if your budget isn’t working for you, if you are feeling depressed, if you just feel like you can’t see the light at the end of the tunnel, don’t quit. Don’t stop. You’re only going to get better with your money the longer that you work at this. The important thing is, no matter how many times you feel or how crappy you feel about yourself, don’t stop. Work to make it better.
- Get everyone on board. The more people that you have on your team rooting for you with your financial Independence and situation, the easier it will be to stick to your budget and to make it work better for you. this really especially includes your spouse. If you have a spouse that isn’t With your budgeting, it will make this process incredibly difficult. You might have to make the budget for yourself and then show your spouse the cold hard numbers in order to get them to realize the gravity of the situation. But if that’s what it takes, then you take the initiative to do the budgeting at first on your own.
- You have more control than you think. You really do have a lot of control over the numbers and your budget. While you might not be able to make $100,000 in a year, you can control a lot of your expenses. You can change a lot of your bills. You can even find new ways to bring in additional money.
I promise you. You can do this! Ready to get started?
Here’s how to start a budget the easy painless way.
Step 1: What is your income?
This will be the easiest part of setting up your budget. If you have a very regular income or a salary, this will be very very easy. All you need to do is add up each of your paychecks and this is how you determine your income.
If you have your regular income whether it is from a commission-based job or if you have a potential for overtime earnings, always go with the minimum amount of income that you bring in. This will leave you with a lot of wiggle room for when you have a really good month. But it will also make sure that you don’t plan to have good months all the time.
Example: If you have a waitressing job and you’re only guaranteed your hourly wages $1,000 a month but you can make up to $3,000 a month if you include tips, then only budget for the $1,000.
Step 2: What are your bills?
This is going to be a trickier part, but it is really important to do.
At the top of a piece of paper, right in your income from Step One. If you feel as though you can depend on more overtime or sales commission, then add it to your income. But don’t feel as though if you need to add sales commission and overtime. Actually, it’s better to go lower with this number.
Underneath of your income in a new section on the paper, you will need to write in all of the bills that you have each month. Every single one of them. But you will only need to list your bills. I don’t want you to count in any other expenses.
List every single bill that you get. It doesn’t matter how small that it is. Every bill you need to pay every month should get listed here.
Once you have all of your monthly bills listed, add them all up. Subtract these bills from your income. Hopefully, you will have some money left over.
If not, we will work on that below. But don’t stop here just because it’s showing that you don’t have any money left over! Keep going that we can really figure out all that needs to be done with your budget.
Step 3: Let’s talk groceries!
Why do groceries get their own step in your budget process? Because it is the largest variable expense that you have each month.
It’s really important to nail your grocery budget down for you can move on anything else. It’s also really important to decide on a reasonable amount to set aside for groceries each month. If this is the first time that you have ever focus on your groceries, don’t set your budget low expecting that you’ll be able to make it work for you. Set your budget higher than usual and then you will reduce it later.
The worst thing that you could do is budget $50 for the month and spend $400 in one shopping trip, and then quit trying to budget your groceries. You can budget a little bit higher than you think you need to and then it just as you go on.
How much should I set aside for groceries?
In order to figure out how much you have been spending on groceries, you need to go through your monthly receipts or your debit and credit card statements to find all of your purchases that were food-related. Yes, even going out to eat is going to be included in your grocery budget.
If your number was over $1,000 cut it back by 15% and then use that number as your budget for next month. If that is still a number that you think is too high, you can cut it back even more.
But it’s incredibly difficult to make a change that will last for a long time if your cut backs are too drastic from the beginning. Make your cut facts smaller and more incremental at the beginning. The last shocking that they are, the easier that it will be to stick with your budget.
It is recommended that you allow a budget of $100-125 per person per month.
Simple math: if you have 4 people in your house your budget should be between $400 and $500 a month. So if you’ve been spending $1,500 a month on groceries and going out to eat multiple times each week it’s going to be really difficult to stick to a $500 a month budget.
Set a goal the next month that you feel is reasonable.
If a 20% cut back feels like it’s something that you can do, then make that your goal. You’re going to cut back again next month and the month after that.
Don’t worry. These changes won’t happen overnight. The last shot game you make the changes from the get-go, the easier that it will be for you to keep them in the long-term. Baby steps!
Some really great resources to help you slash your grocery budget:
- Free Meal Planning Video Workshop (with a free meal plan)
- 6 Steps to Drastically Reduce Your Grocery Budget
- The Trick to Keep Grocery Spending Under Control
- 7 Super Easy Ways To Make Your Grocery Budget Last
- 5 Side Hustles That Pay For My Groceries (and More!)
Step 4: What can you cut out?
Now that you can actually see all of your monthly bills, is there anything that you can do to reduce your monthly bill payments?
The easiest way to do that is to find things to cut out or to replace.
- Are you still paying for cable? Why not try replacing it with Hulu and Netflix.
- Are you paying for unlimited cell phone data that you don’t use? Try calling your cell phone company to see what kinds of other plans they offer.
- When was the last time that you spoke with your insurance company about lowering your bill? Are you paying for more insurance than you actually need?
- Do you have magazine subscriptions that you aren’t using that you’re paying for? Get rid of them.
- Did you know that you can rent movies from your library? And it’s free!
- Did you know that you can negotiate a lot of your bills? If you think that you have some bills that are just way too high for you and your budget, call them and negotiate new rates. If they won’t negotiate with you, then you can find a substitution or replacement for it.
Finally, if you feel like you’re not getting anywhere, just play a little hardball. Remember, these companies want to keep you as a customer. They will do just about anything to make that happen. If you stick to your guns and play hard to get, you will likely see someone reaching out to you again in the near future (you’re welcome).
Step 5: Create multiple accounts to help save for surprises.
Once you have your bills each month written down, there going to be other expenses that need to be covered every once in awhile. These could include things having to do with upkeep on your car or property taxes or gift and vacations.
These occasions should not derail your month-to-month budget. Instead, make a special occasion bank account that is separate from your primary checking account. Each month, just add money to this account to fill it with the necessary amount for the upcoming occasion.
Recently, I’ve been using Digit to save extra money in my bank account that gets set aside for our family vacation. In just a few months, I was able to save more than $300 in just pocket change left over from our budget! And now it will fill back up again in time for Christmas! You can find out more about Digit and get started for free.
Example: You know that you need to save up for Christmas and you don’t want to wait until the last minute. You’ve decided to set a budget of $100 per person for your family of 4, making your overall budget $400. If you have 6 months to plan for Christmas spending, you will need to add $67/month into this account, or $17/week.
You can do this for many different occasions:
- Special occasion
- Date nights
- New cars
- New furniture
This is a key to building up a healthy spending-and-saving relationship with your money. You know that you want or need to spend money in the future and instead of taking out a loan or putting it on a credit card or taking it out of your regular spending budget, you are able to plan for it.
My husband and I have at least 6 bank accounts that we regularly work with. It helps us to stay on track with our spending while still having money going into savings accounts each week.
See, that wasn’t so bad!
Now you’re on your way to starting your budget! Really, it starts with some math and ends with a lot of hope and actionable steps to make a difference.
The biggest thing in budgeting is to never quit.
You can slip up, you can fumble, you can lose focus. But always pick yourself back up and try again. No matter how hard it is in the beginning, the hardest part is to start!
I know that you can do this! My family made it work on $17,000/year using this budgeting system and I know that if you follow it, it will help you get started too!
Other budgeting resources to help you get on the right track:
- Make more from your pocket change and get $5 for starting with Acorns (my latest, FREE automatic money saving obsession! You’re going to love it!)
- How to Save Money When You Don’t Feel Like It
- Budgeting Allows You to Spend MORE
- Fixing a Budget that Spends More Than We Make
- The 2 Biggest Budgeting Lessons to Make Your Budget Stick
- Top 10 Things I Did to Pay Off Debt in 2 Years
- How to Talk With Your Husband About Money
- How to Make Saving Money Easy
- What Do You Do When You Get Behind on Bills
- 6 Steps to Drastically Reduce Your Grocery Budget
- Budgeting Books You NEED to Read
- 90+ Budget Categories That You’re Forgetting About
- How to Feed Your Family on a Budget (so You Don’t Feel Poor)
- The One Weird Trick to ALWAYS Stay Under Budget
- The Best Budget System When You Can’t Budget
- 7 Super Easy Ways To Make Your Grocery Budget Last
- I HATE My Monthly Budget (And What I Use Instead)
- Money Saving Hacks from an Extreme Cheapskate
- Money Saving Websites That Thrifty People Love
- Best Money Saving Apps You Need
- Money Saving Tips That Helped Us Save $21,972 Every Year!
What is your biggest budgeting struggle?
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