We have all been there (some of us still are). We feel good about the money in our pocket, we buy some food, we make a purchase that we want (but don’t necessarily need) and suddenly, we’re short on cash.
Does this happen to you more than you’d like? Does it stress you out? (it stresses all of us) Or even force you into debt?
It’s probably time to make a budget.
Don’t worry, it’s easy! And you can use a calculator!
Really, a budget is just a list.
Step 1: Take a paper and draw a line down the middle.
Step 2: Make a list of all your income coming in the door every month. Every paycheck you get. Maybe a regular side hustle. Do you get alimony or child support? What about income from investments? Everything.
Step 3: Then, on the other side, start writing your expenses. Start with the big stuff: rent, car payments or transportation, utilities, groceries, any debt payments you need to make — things like that.
Step 4: What about everything you spend money on that you like, but maybe don’t need? Eating out, entertainment, that new pair of shoes. Add those as a list to your expenses. Treating yourself is great! But you want to do it within your budget.
Step 5: Don’t forget to set aside some savings for a rainy day. It’s smart to have this baked right into your budget.
Now you have the beginnings of your monthly budget! You can add up all your expenses and subtract it from your post-tax income. How did you do?
It’s most efficient to build this kind of budget on a spreadsheet somewhere — whether it’s Microsoft Excel or a Google doc. Then add new expenses as you spend.
And those new expenses will surely pop up. Try to do as much planning as you can for those once or twice a year costs — like buying presents around the holidays, or that vacation you plan every year. Or, the unexpected doctors visit.
The more you track your spending and keep an eye on it, the better you’ll get with your monthly expenses.
Keeping electronic records of your spending will help you stay organized. And there are apps out there that can help you too — some can link your credit and debit cards to your budget so you can keep track, or even set limits.
At the end of the day, it’s still a rat race out there. Money can be tight even if you’re doing everything right.
But the best way to not be scared is to be prepared. And the budget is your first step.
Here’s a budgeting spreadsheet for you. Hope it helps! Budget Worksheet