Creating your budget is probably not going to be the most exciting thing you do this week but it is necessary.
It’s necessary because you must take 100% control of your finances. You work hard for your money so you need to make sure it’s spent wisely and it’s not spent on junk you don’t need. Do you want to work until you’re 60 or 75? Probably not. If you do work until you’re 55, 60, or even 75, it’s because you want to, not because you have to! Make sense?
Also, don’t feel bad about the buying junk part. We’ve all accumulated stuff we don’t need over the years but it’s important that we make the decision to stop. No more overspending on; clothes, jewelry, purses, notebooks, sunglasses, shoes, fast food, etc.
I want to make sure you actually follow through and create your budget so right now, grab your phone. Set a “Create A Budget” alarm. If weekends work better for you, set an alarm for early in the morning. If weekdays work better for you, set an alarm for early in the morning and get it done! I recommend 7:00am or 8:00am.
Please don’t skip this step, do it for your future self. And I don’t mean your 50 year old future self. I mean your future self in the near future, you will start seeing the benefits within a few months.
You will see your savings account start to grow, feel better about yourself because you’ll be disciplined, feel lighter because you won’t have so much stuff. You will also appreciate the things you do buy A LOT more.
One important thing to mention. Just because you have a budget, that doesn’t mean you can’t have fun and enjoy life. You can have a budget AND you can still travel, treat yourself to a nice purse, buy that Starbucks, go to nice dinners. So don’t think that you will be limited because you’ve made the important decision to create a budget.
For example, during the seven years that I saved over $100,000. I traveled to Mexico a few times. I went to Madrid, Spain AND I went to Lima, Peru. You can have a budget and still have fun and enjoy life.
Also, you might be thinking that creating a budget is overwhelming, time-consuming, or even complicated, but it won’t be. It will be easy. And for most people, you only have to update your budget every 6-12 months. You only have to update when your income changes or when you have a big unexpected expense come up.
There are many goals to creating a budget and the first ones are for you to clearly understand how much money you make, spend, and save. This is truly my favorite part about creating a budget with anyone. If you don’t have a budget, you simply have no idea how much money you are spending and it’s eye-opening.
It’s eye-opening because you probably don’t understand how much money you are really spending every month, and it’s probably more than you have to.
So let’s get started! You can download the Google spreadsheet that I’ve created below for FREE. The step-by-step instructions are below but the spreadsheet also walks you through how to complete each step. So you can reference and bookmark this article whenever you need a few extra budgeting tips!
You can get a FREE copy of the 5 Easy Steps to Budgeting Success Google Spreadsheet by clicking here! Make a copy, and follow the step-by-step instructions below 🙂
Step 1 – Enter your monthly income and fixed expenses.
During Step #1, you will enter the amount of money you make every month and, all of your fixed expenses. Fixed expenses are expenses that you have every month and most likely don’t change.
Expenses like your; mortgage/rent, utilities, car insurance, gas/transportation, cell phone. If you have credit card and/or student loan debt, enter that as a fixed expense and treat it like one. Commit to paying the same amount every month, and not just the minimum balance 🙂
Step 2 – Enter your monthly savings dollar amount goal.
When you get to Step #2, you can clearly see how much money you have left for savings and variable expenses. Are you surprised by your total fixed expenses number? Did you know you were spending that much every month? This is eye-opening and very helpful as you move forward in the next budgeting steps.
In Step #2, you will choose how much money you want to save every month. You will also be realistic about your savings number because you will know exactly how much money you have after paying for your fixed expenses.
Step 3 – Assign a budget to your variable expense categories.
You made it to Step #3! After setting a savings goal, you know how much you have leftover to spend on your variable expense categories. It’s a great idea to set a saving goal first because you choose what you spend on your variable categories so you can play around with that number.
It’s not like your fixed expenses where you have to spend a certain amount.
I sometimes hear that people treat food as a fixed expense but it’s not. YOU choose how much you spend on food and it’s important not to overspend because it can be easy to do. It’s easy to spend a lot of money on food because it’s something that we buy all the time.
If you are not sure how much money you should spend on eating out and groceries, read this amazing post that gives you great perspective and ideas.
Step 4 – Plan your shopping trips for your variable categories.
Step #4 is all about PLANNING. I strongly believe that planning is the key to actually sticking to your budget and making sure you don’t go over. Schedule your planning sessions and make them fun! Do it in the evenings. Grab a glass of wine or your favorite beverage, some snacks, play your favorite music, and commit to getting it done!
The overall goal of planning is for you to be aware of how much you will spend before you actually spend any money at all. Let’s say you’re grocery budget is $200 a month. If you are planning for two weeks’ worth of food, you know to spend only about $100 so when you plan you will plan to buy food that totals only $100. Make a list, put the estimated price next to each item, and see what your total will be.
Step 5 – Track your variable expense spending.
The last step, Step #5, is also very important when it comes to sticking to your budget and not going over. You want to make sure that you track what you actually spent at least once a week so that you understand where you are in your budget. Are you close to going over? Do have $100 to spend for the rest of the month?
Commit to tracking your expenses at least once a week. Do it in the evening while watching your favorite reality TV show! Any show works, just do it!
In the Google spreadsheet that I created and that you can download for free. There’s a second tab called, “Spend Tracker”. Here is where, at least once a week, you will enter what you’ve actually spent.
The spreadsheet makes it really easy to see your grand total because it adds up your total for each category and you clearly see how much you’ve spent so far AND how much you have leftover.
So what do you think?
I can keep writing about how important budgeting is and deep down you know it is but will you do it?
The budgeting for beginners step by step instructions are here, right in front of you!
So grab your phone, set an alarm, for early in the morning, and get it done.
Remember that the key to sticking to your budget is PLANNING so don’t forget to schedule fun planning sessions as well.
It gets easier and easier the more you do it. It becomes second nature, a good habit you’ve established as part of your weekly routine.
I’m so excited and happy to see your saving account continue to grow as you commit to your budget and follow these 5 easy steps to budgeting success!
Have fun budgeting!