One thing you can be sure of, if you don’t budget your money you will not know what happened to it. Odds are, if you don’t know what happens to your money you aren’t managing it. What does that mean? You’re not setting yourself up for a financially free life (among other things).
Sitting down to write out a budget and track every penny is what experts suggest in order to take control. This can be incredibly daunting if you’ve never written out a budget before. A more simple approach might be helpful… think of it as baby steps to full fledged, track every penny budgeting.
The important thing to remember with this beginners approach, you are still accomplishing the major steps in money management. So, if you do this bare minimum, you will be making great progress toward financial freedom.
Once a month sit down for a financial meeting.
If you are married, sit down together. During this basic meeting, you will simply review the month ahead.
- Are there any additional expenses that are necessary (out of the norm) for the month? For instance, this month we have swim lessons starting for the kids so that’s an additional $80 we normally wouldn’t spend.
- Review any goals you’d like to set for the month. Some goals might include paying off a bill, reducing your grocery bill by $200 (with coupons and planning ahead) or saving $500 for your emergency fund.
You can find a beginner budget download here.
It’s important to keep track of your debt snowball and make sure you’re actively working towards eliminating it as well. It’s easy to lose site of your debt if you don’t have an active plan for it.
I like to track our normal bills each month and check off when they’ve been paid and compare them to last months bill. You can find the steps to create a binder that will keep you nice and organized here.
At the bottom of your beginner budget, leave room to track ways that you’ve managed to save or make more money. For instance, if you sell something on ebay, in a garage sale or how much you’ve saved with couponing!
Budgeting is a dreaded process by many. You’ll find if you take these little baby steps towards managing money, it’s not at all as difficult as you might think.
Please share some budgeting tips and tricks that you have up your sleeve!