Budgeting for Beginners

Setting up a budget forces you to face your spending habits and then set financial goals. When you decide to make a budget, remember that they will vary by individual and family. It’s important to set up a budget that fits you. The result will bring you peace of mind. 

Follow these steps and adjust them to your needs to create a monthly budget that will set you up for financial success.

Step 1: Set Financial Goals

When setting your financial goals, think about the reasons pushing you to create a budget. Set short-term and long-term goals. Once one goal is complete, you can move on to another and personalize your budget to fit your needs.

Step 2: Enter Your Income, Expenses, and Savings

Use an excel spreadsheet or other budgeting platform to track your monthly expenses and spending. List each expense. This list is the foundation for your monthly budget.

Step 3: Review Your Monthly Income

Determine how much money you take home every month. Include any passive income, rental income, child support payments, or side gigs. If your income varies, you can use the average of your income for the past three months.

Step 4: Create a List of Your Mandatory Monthly Expenses
Such as:
  1. Rent or mortgage payment
  2.  Utilities like electric, gas, water bills, internet, and phone
  3. Car payment/ transportation costs
  4. Insurance 
  5. Groceries
  6. Debt repayments for credit cards, student loans, medical debt, etc.