Financial Freedom Friday: How to Start Planning a Budget
| September 21, 2012 | Posted by Jessie under Financial Freedom Fridays |
It’s been, oh, about 5 months since I’ve written one of these. I was recently talking to a friend about starting a budget and it got me back in the mood to write about budgeting. Since reforming my shopaholic ways and honestly enjoying the challenge of saving moola, our bank account has come a long way. I realized that I’ve talked about how we keep track of our budget and meal planning and creating your budget, but I never really gave anything to get started. So today I’m here with a printable you can take today and work on over the weekend:) I did make it cute so you would want to use it!
You can right click the picture and save or go here for a high-resolution version.
Ok, let me explain how it works.
- Start by sitting down with your check book, online bank account, whatever you look at to see what you’ve spent recently. I suggest getting 3-6 months of expenditures in front of you to get the best average.
- Categorize your spending {like I’ve done for you above} and write down what you spent in each category each month.
- Average those numbers together and record it on the printable above for each category. For example, add up how much you spent on dining in June, July, and August and find the average of those months and write it on your planning sheet.
- Add up all the different categories and record that on the line that says Total Average Monthly Expenditures.
- Subtract that number from your monthly take-home income and you will {hopefully!} be able to see how much you have left each month.
We were completely shocked the first time Mike and I did this. We spent wayyyy more in some categories than we ever would have guessed. So we started playing around with our numbers. We took a few weeks trying to see how little we could spend in each category. What is a realistic but minimalist amount we could spend on groceries? Once we found a number that worked for us {$50/week} we stuck to it, wrote it on our monthly budget sheet and write down each time we go to the grocery. We’ve been doing this for about 3 years now and are still going strong with the numbers we set. Our “remaining” amount each month is much higher than the amount we spend each month. Anyone want to know the key to saving money? That’s it:) Such a secret, I know. I realize a lot of people don’t pay much attention to what you spend on a regular basis, but it makes such a difference! You will be amazed at how much you can save if you just watch what goes in and what comes out and be diligent with your goals.
What are your secrets to saving? Are you a budgeter too? Who’s going to try this over the weekend? I see hands shooting up all over the place;)
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[...] PS-if you need a quick budget run-down and ways to get started now, check this post! [...]