Embarking on the journey of crafting a budget can feel like navigating uncharted waters, especially for beginners striving to gain control over their finances.
In this comprehensive blog, we unveil the secrets to crafting a budget with ease, offering a roadmap that transforms the daunting task into a manageable and empowering experience. Bid farewell to financial stress as we unravel the simplicity behind effective budgeting.
Join us on this transformative journey, where the path to financial order becomes not just accessible but surprisingly straightforward with our expert tips. It's time to alleviate the stress and embrace the empowering art of budgeting.
Table of Contents
Figure Out What Your Monthly Income is
Calculate Monthly Expenses
Make Realistic Savings Goals
Track Your Spending Activity
Pick Which Type of Budget Works Best For You
Stay Consistent With Your Budget No Matter What
Remember You Are Doing This to Achieve Your Goals
Learn a Few Quick Tricks to Master Your Budget
Look at Your Budget Daily to Stay on track
Don't Be Afraid to Ask For Help
What is Your Why?
Anything Worth Having is going to Take Sacrifice
Figure Out What Your Monthly Income is
Do you get paid 1 or 2 times a month?
Begin by determining your monthly income – whether it's received once or twice a month. The initial step in creating an effective budget involves totaling your monthly earnings and documenting them. As a beginner, understanding the precise amount you bring in each month is essential for budgetary success.
Additional Income or Side Hustles
- Do you have any additional income or side hustles to put in your budget? We know that side hustles are not consistent but you can add them to your budget when you receive that extra income.
- Don’t be stressed out because your income is inconsistent like being paid based on commission. Just try to estimate what your baseline income is each month. You will get better over time and be able to predict what your average income is.
Calculate Monthly Expenses
What are your monthly expenses every single month? These are going to be things such as:
- Rent/Mortgage
- Movie subscriptions
- Car Note
- Car Insurance
- Credit card bills
- Life insurance
- Electric Bill
- Water Bill
- Any other Subscriptions
Write down all of the things you have to pay first, then any other elective subscriptions last. You want to make your budget have all of your main priorities listed first. That way it is easier to see which ones can be canceled if necessary.
Are There Any Subscriptions That Can Be Canceled?
When you are building your budget, the purpose is to get better with your finances and save more money to reach your goals.
Therefore, you should be asking yourself are there any subscriptions that I should cancel to free up extra cash flow?
The less subscriptions you have means the more money that you have to contribute towards building wealth.
Make Realistic Savings Goals
When you are making a budget, it is important to make realistic savings goals. If you can only save $100 a paycheck, stay consistent with that.
You will find out quickly how much money you can save when your budget is in place. The less expenses you have hanging over your head the more money you will be able to save in the long run.
Stay out of debt to maximize savings potential to the fullest. Over time you will be able to save more and more money when you get out of debt and get raises from your job. Check out this Blog on 10 Tips to save money.
Track Your Spending Activity
The whole point of a budget is to track your spending habits and to help build better financial literacy. When you make your monthly budget with the every dollar app you will be able to track your spending activity to analyze your weaknesses.
Your budget will help you focus on what matters most so you can save more money and build better spending habits. Just being able to visualize your spending activity will automatically help you build money habits and wake up to your nuisances.
Pick Which Type of Budget Works Best For You
Pick the budget that best resonates with you. There are a couple budgets to choose from here are the most popular ones:
- Zero based budget: a zero-based budget is a budget that assigns every dollar you make to a specific task. This way you can control where exactly your money is going.
- Envelope system: the envelope system is a technique to allocate certain amounts of cash to certain categories that are inside envelopes. This system is cash based that way you are not swiping your debit card blindly.
- Two Account Plan: The two account plan is a system that requires 2 bank accounts. One bank account is solely for monthly expenses like rent, mortgage, life insurance, and car notes. The second account is for all other elective things that you buy. This way you can track your spending better.
- 50/30/20 Plan: The 50/30/20 budget plan involves allocating 50% of your income to absolute necessities such as food, housing, and car payments etc. 30% goes to discretionary spending and 20% goes to your financial priorities.
Stay Consistent With Your Budget No Matter What
In order to be successful with your budget you have to stay consistent no matter what. Especially as a beginner so you can develop the good habit of staying financially accountable.
When you learn your money habits it will get easier for you to see what areas you need to improve in. Just remember to have patience with yourself along the way and you will see some changes.
If you see yourself falling off just remember to jump back on it and never give up. The only way you win is if you never give up.
Remember You Are Doing This to Achieve Your Goals
When you are starting out making a budget, remember you are doing this to achieve your goals. It's going to be difficult at times to follow a budget, but you have to develop the discipline to tell yourself no when your friends want to go out.
Remember this is not going to be forever, one day you will be able to spend your money how you want. This is temporary until you get your finances in a position to be comfortable to spend money on the things you want.
Learn a Few Quick Tricks to Master Your Budget
Here is how to make a budget that actually works for you.
Look at Your Budget Daily to Stay on track
One thing that can help you with your budget is to look at your budget daily to help stay on track. This way you will have your goals constantly on your mind and that will help you take them more seriously.
You won't have to do this forever just until you develop the habit to follow your budget consistently. If you can follow a budget for 30 days your mind will develop the habit to stay on track and have good money management.
Don't Be Afraid to Ask For Help
Although you might be a beginner, we know that making a budget can be quite a task for someone who has never done one. If you are starting to get overwhelmed with making a budget download this free app Every Dollar.
This app will help you make your first budget with ease. Don’t be afraid to reach out and ask for help with anyone who has good financial literacy. The answer to your question could be easily taken care of if you just ask.
Don't stay stuck on something new because you don't have the knowledge yet. Everyone has to learn so don’t be afraid to ask for help.
What is Your Why?
Remember to ask yourself what is your why? Why do you want to build a budget? Maybe you want to buy a house for your family? Maybe you want to get out of debt.
No matter whatever your reason is, always remember why. Your why is what's going to catapult you through and keep you on track to reach your goals. Always remember your why when you are starting to have doubts.
Anything Worth Having is going to Take Sacrifice
Making a budget will be worth it in the long run. Remember anything worth having is going to take sacrifice. Sacrifice is taking something of a lower nature and exchanging it for something of a higher nature.
Previous
Next
About the author
My name is Aisha Whitlock, I'm just a regular person just like you. I just love to help people get back control of their financial destiny.
You may also like
Master The Art of Passive Income to Start Building Wealth
Master The Art of Passive Income to Start Building Wealth
How Can the Average Person Become a Millionaire?
How Can the Average Person Become a Millionaire?
