How many times have you considered getting your spending under control but felt completely helpless and confused by the whole idea of it? I can't even count the times I've personally felt that way.
If you've hit the gotta-start-somewhere phase, then this post is for you. It's also for anyone looking for an idea on how to begin.
First things first. You've got to understand where your money is going. Do you eat out all the time? Buy whatever you're craving at the store? Have an online shopping addiction? Before our family started budgeting, we were eating out constantly instead of cooking at home, buying whatever we wanted from Amazon (curse you Prime!), and spending a small fortune at the grocery store. Something had to change.
That something was our budget and how we used our money. I'm going to list a few tips on getting started. These were the ways I personally approached setting a family budget, you can use whatever method you prefer.
1. Start by printing off a bank statement for you debit account(s) for the month. You want it to reflect enough days from the first day of your last paycheck to the present day.
2. Grab some colorful highlighters! I suggest a color for groceries, eating out, gas, shopping, and bills. On another sheet of paper write down the total amounts of each of those categories. Ever wonder where all your money goes? This will show you how much you've spent during your current paycheck.
3. From the totals you've written down, figure out how much you REALLY need. We have a family of 4 and spend $460 on food item groceries each month. I set aside an additional $40 a month, $20 of which goes to personal items (toiletries, hair stuff, etc) and the other $20 goes to a sinking fund for Costco that I keep in my wallet. I try to plan ahead for those types of expenses so by the time we need more diapers, I can just pull from the cash divider in my wallet and there will be more than $20 in there as I add $20 each month.
4. You will want to get yourself a budget planner. I got one that I love! It's really detailed and organized which is how I like my planners. I also have a journal that I write everything down in: goals, how much I need to make per month to afford life and bills, savings plans, etc. You can even go further and buy a mini planner (I LOVE the Happy Planner brand) to keep with you in your purse. You can write down bills due in it and if you have a job like me where you make tips, you can write totals down just to keep track. Just a thought!
5. Write down every single bill you have including things like oil changes, random payments, moving expenses etc. This way you can plan ahead for those things coming up in the month without breaking your budget.
6. Your budget should consist of things you spend money on besides bills. Ours are: food groceries, personal items, Costco, home, gas, car maintenance, kid's fund (clothes, shoes, etc). I make sure our budget has enough cash for all of these categories each paycheck. Once we run out we're done. If you're just starting out, chances are you're going to mess up your budget a couple times. And that's ok! Like anything else, it takes getting used to and takes a lot of self control. We live in a town that has such good food and so many fun places to go out. We have to be very strict about where we spend our "fun" money or else we'd have that categories drained in 2 days! You'll get the hang of it and you will see that by sticking to your budget and setting goals, you'll have so much excess in savings to throw at debts or add to your savings accounts!
7. The last thing I did was make some cash envelopes. When I first started out I wrote a category on each envelope. After a couple weeks I found what worked best for me was a cash divider system. I made my own dividers by wrapping some card stock with super cute washi tape. They fit perfectly in my wallet and for me we're much less awkward than pulling out a "grocery" envelope every time. I add all leftover change to a change bag that we wrap and deposit straight to savings each month.
Again, these were my personal steps but I think they can be helpful. Saving money, budgeting and getting out of debt can actually be fun! That sounds insane, I know. But it can. It gives me such a sense of happiness to see how organized I have become with our finances. There are few better feelings than seeing that you've budgeted appropriately and we're able to handle bills and expenses without feeling like you have nowhere to pull the money from. Been there, done that! Give it a try for 2 weeks and I promise you will see and feel a difference! It becomes addictive.
You've got this!