Budgeting

My husband and I made a life changing decision last year when we decided to build a house. It is one of the best decisions that we have made; however, it was extremely terrifying the first time that we received a mortgage payment. It was a HUGE wakeup call that we were A.) Real adults and B.) Needed to begin a monthly budget. It has taken months, MONTHS to figure out this whole budget thing, and I am still adjusting it slightly every now and then.

I’m not really sure why budgeting has been so difficult because I was raised in a middle class family who lived on a strict budget. As a kid I remember asking my parents why we weren’t going to this place on vacation or why I couldn’t buy this new toy (side note: I was by no means deprived whatsoever as a child, but I constantly compared what my family was doing to my friends’ families). They would laugh and say because we are on a “budget”.  Gah..that awful word that I have so feared. My parents worked extremely hard and saved their money, which has allowed my dad to retire before the age of 60 and my mother to retire this year. Huge props to my parents!

That being said, I should have known what I was doing when it came to creating my own budget but I had no idea where to begin. Here are my steps for figuring out a budget AND sheets to help you learn how to budget.

Step 1: Write down all of your expenses for 1 month.

Write down ALL of your expenses and I mean ALL. You might think that is an easy step; however, if you are just moving out on your own it can take some time to set it up. Your bills might fluctuate depending on the time of the year and emergencies will pop up.

Step 2: Input your expenses into a budget spreadsheet.

Once you have figured out what you spend on average a month, put it into a spreadsheet. Some of my favorite ones to use can be found on the Suze Orman website as well as google docs. There are PLENTY of websites that have spreadsheets available; you just have to find one that meets your needs.

Step 3: Pay with cash!

One area that I have personally struggled with on the budget is the entertainment and clothing area. I want to constantly do fun things, but have learned that sometimes I’m not able to do those things or purchase new clothes all the time. Become real and honest with yourself. DO NOT compare yourself to others because it will not help. I have begun paying with cash rather than my debit/credit card. Personally for me, I have found that I tend to go “over budget” when I purchase items with my debit and credit card. Once the cash runs out each month, it’s a wake up call that I cannot spend anymore.

Again, the more time that goes on, the more that you will be able to learn about your budget. Good luck!