I’ve never quite figured out why everyone hates to sit down and make a budget so much. I budget every month, and sometimes twice a month depending on pop up purchases/expenses/wishes. I can honestly tell you that budgeting saved my sanity.
I’m going to ask you a simple question: Where does all of your money go? No seriously where does it all go?! I thought I knew until I sat down and actually started budgeting to figure out how much things should cost. By sitting down and tracking your expenses you learn some pretty interesting things about yourself.
- 1 What expenses do you have?
- 2 Do you splurge for extras all of the time?
- 3 What areas can you cut down even more?
- 4 Do you have a contingency fund for when life punches you in the gut?
- 5 What are your long term goals? How much do you need to save a month to meet these goals?
- 6 Related
What expenses do you have?
The first thing to do is figure out how much all of the big expenses cost. That includes rent/mortgage, groceries, gas to get to work, utilities. These are what I consider the necessities and need to be taken out first. If you’re left with pretty much nothing after they’re gone, you need to reevaluate why they’re so costly. You could decide to get a more gas efficient vehicle, buy off brand items, install energy efficient light bulbs, etc. to drive these costs down.
Do you splurge for extras all of the time?
When you sit down and analyze what stuff you’re buying you quickly realize that you don’t NEED everything you’re buying. For instance, I now buy mostly store brand groceries instead of the name brand foods. They taste the same and it means I have more money to go into my Fun category. Which brings me to another point, do not go spend $20 in a restaurant for a meal you can make at home for $4. Yes it’s more work but by the time you add drinks, appetizers, and a tip it’s outrageous. It’s fine to treat yourself every once in a while but try to eat in as much as possible. Not a good cook? I’m pretty sure that’s why Pinterest was invented..
What areas can you cut down even more?
There are always things that you can cut down on. Do you need the fastest internet or can you get by with an average speed? Do you have to drive a brand new car, or can you buy one that doesn’t have a monthly payment to make. It’s these small little compromises that will help you get your finances back on track and make you feel comfortable. It’s fine to splurge every once in a while but think about the things you could get instead! I also recommend looking up coupons or checking out my 5 favorite money saving apps to help save even more.
Do you have a contingency fund for when life punches you in the gut?
It will happen, trust me, and when it does it’s going to hurt a whole lot more if you don’t have any money saved away to pay it off. I’m talking about medical bills, accidents, your car breaking down, electronics breaking. You don’t want to be scrambling to come up with the money to pay for these things so save yourself some stress and make sure you have money put aside to do so.
What are your long term goals? How much do you need to save a month to meet these goals?
So, first: what are your big savings dreams? Are you saving to buy a new house, new car, a new TV? You need to make a timeline of when you would like that by. If it’s in 3 years, divide the cost of it by 36 (number of months in 3 years) and put that much away each month. When you do it like that, it suddenly seems attainable. Trust me!
Budgeting isn’t hard and I stand by my claim that budgeting saved my sanity. I’ve come up with a standard budget for you to print out and see how you’re doing. Click the link below It might take a little bit longer the first time to look up your finances, but it’s definitely worth it in the long run.
Good luck and give yourself a nice pat on the back when you’re done for being smart with your finances.