Prior to learning how to budget money I used to feel as though I lived paycheck to paycheck. At the end of every month, I did not understand how I was always out of money. Once I learned how to budget money I was able to understand that budgeting was all about telling your money where to go. Now that I know how to budget money I see unlimited possibility and an actual path to financial freedom.
A lot of people associate needing a budget with being broke. However, I am of the opinion that a budget is essential for everyone, especially those who are just starting the adult life. If you have a Income then you need a Budget. Honestly, the sooner you learn how to budget the faster you will reach your financial goals. Every morning I listen to the Dave Ramsey’s Podcast on my way to work. One common theme among his callers is the importance of a budget.
In this post, I will be sharing with you how to budget money and what I use to help me budget my money monthly.
HOW TO BUDGET MONEY
ZERO BASED BUDGETING METHODS
There are a number of budgeting methods you can incorporate. The key is to actually find one and incorporate into your lifestyle. Over the past year, I have tried pretty much all of them (at least the ones I came across on Pinterest). The one budgeting method that has seriously helped me is the zero-based budgeting method.
First, figure out how much money you bring in. For those who are full-time and salaried this part is easy. However, if you have an irregular income, I highly suggest you check out this blog post on how to budget when you have an irregular income. If you have a side hustle, you may choose to include these into your income. I personally do not as I like to use my side hustle money strictly for paying my debt off faster.
Once you have your income together you then want to gather up all your monthly expenses. Start deducting your expenses like your rent, car note, insurance and etc from your income until you reach a zero dollars. If you find yourself still having money left over that is a good thing. You can start budgeting what is leftover for other things such debt repayment, car maintenance, or vacations.
If you find yourself not having any money leftover, pay for your necessities (food and shelter) first. You may also want to look into getting a part-time job to supplement the difference.
For me doing this part of my budget for the first time was an absolute wake up call. I learned that after I finished paying all my monthly expenses I was basically blowing through my leftover money. Now that I am on a debt journey I use my leftover money to make extra payments towards debts and my sinking fund.
RELATED POST: How to Get Out of Debt
TRACK YOUR MONTHLY BUDGET
Budgeting is all about consistency. It took me a few months for me to get my monthly budget together and actually stick with it. During that time I learned ways to keep me on my track with my budget.
iPhone Notes: During the month my iPhone notes app is my saving grace. I use the notes app on my iPhone to track my monthly bills as my billing invoices come in. Each time I get an invoice to my e-mail address I write the amount I owe in my iPhone notes.
Excel Spreadsheet: About the third week of every month I have received all of my billing invoices. Because I have them all in one place my next steps is pretty easy. With all my expenses in one place, I open up my excel spreadsheet and plug in the numbers for the month. My excel spreadsheet is formulated to do all the math part for me. Because I love you guys so much I decided to share my budgeting excel spreadsheet with you. You can grab your copy by subscribing to my mailing list down below.
Happy Planner Budgeting Edition: Because I like to write out my monthly expenses I find this step very essential to my budget. I have wrote out my monthly expenses every month for the past 8 months that now I pretty much know the amount of money each bill should be. This means I am very good a detecting when a bill is off. This step is also helpful to me because it allows me to mark which bills I have paid for the month. You can purchase the Happy Planner Budgeting addition Planner here
Every Dollar App: This is a free iPhone or Android app that has made budgeting simpler. I have tried quite a few budgeting apps and most of them you have to purchase in order to get the full benefits of it, or you are required to link your bank account to use the services. Fun Fact: the terms and conditions of most bank state that it will not protect you if your account is compromised by linking it to a third-party service. With the Everydollar App you do not have to link any bank accounts. Check out this blog post on how to use the Everydollar App.
There you have it. These are my tips to effectively budget your money. If you have any tips and suggestion for other be sure to share them down below in the comment sections.