Creating and using a budget can be a very daunting task. But a budget is the very foundation to being able to win with money. It’s hard to know where to start, what line items to put in the budget, how much money to spend (or not to spend) on each item and this is even before you consider how you’re actually going to follow the budget. Well, pour yourself a glass of wine and let’s walk through some budgeting basics.
- Write down (or enter into a spread sheet) how much you spend on each category. You may be able to do this in one sitting, or you may need to go for a month and track your spending to see where you are. You can use my spreadsheet here.
- Each time you spend from a line item, deduct that amount from your sheet.
- If you use the envelope system, it’s easy to take out all the cash and run your budget from there.
- I always pay all of my bills the day I get paid…including overpaying on my debt.
- The bottom two numbers should always be identical, and should match your bank account. This let’s me know that I’ve balanced…if I’m off, I immediately figure out where and why.
- At first, budgeting is hard work, but the more you do it, the easier it becomes…and it’s really the basis of a healthy financial life.
There are several online budgets available. For years I used Dave Ramsey’s My Total Money Makeover Gazelle budgeting software to keep track of my budgeting. I actually paid $9.95/mo. for the service. My paychecks are bi-weekly and it worked well with my needs. Then his company decided to phase it out and move to Every Dollar. Every Dollar appears to be a good program, but it’s not friendly for those of us who want to budget bi-weekly. I began to search…and search…and search. I couldn’t find a good budget for bi-weekly paychecks. What is a girl to do? So I created my own spreadsheet. My only regret is that I didn’t do this before and save the fee I had been paying.
BTW, I’d love feedback and questions about my budget template. It seems simple to me, but I’ve been using a budget for a long time and it may be confusing to others. If you need some help with your budget, please email me and I’m happy to help walk you through.