How do you get your budget under control? Budgeting is a term that brings fear to the heart of many, but I actually really enjoy budgeting and it has been a mission of mine to make this task less tedious for those who don’t. Budgeting doesn’t have to be scary or uncomfortable, but it can feel that way when your money is in charge. Budgeting is all about making your money work for you.
Successful budgeting starts with a realistic budget. Here are three simple steps to a realistic budget:
- Print out this free Monthly Budget printable and write down 10-12 categories of spending. I suggest categories such as Groceries, Household (supplies for the home, such as dryer sheets), Personal (such as toiletries), Gas (for the car), Home (decor), Misc (reoccuring charges, such as oil changes), Health, Fun Fund (such as eating out), Debt, Savings, Tithe (if you don’t directly take 10% off the top before allocating money, which I recommend), and Bills (all monthly bills). Additional categories that may be applicable to your situation include Business, Travel, and Date Night. Be exhaustive and include anything & everything you spend money on. Combine categories as is convenient for you. For example, Groceries is a category I use to cover food, household supplies, and toiletries since I buy them all together.
- Next, add how much money you would realistically spend in every category for the month. Make sure you give a good amount- at least $100- to the Misc fund as this is the fund things come out of that might otherwise sneak up on you, such as your car tags, and you want to make sure you budget enough to cover those charges. Be sure to be very realistic when you do this. Add up the charges in your bank account or bank ledger, if need be, to give you a realistic idea of how much you spend per month in the different categories. Make sure to inflate each amount just a bit to give you some wiggle room. At this point, you should have your 10-12 categories lined out with the budgeted amounts next to them.
- In the last column, with your total income written at the top, add up all the charges for that month and see how much you spent next to how much you budgeted to spend. You can find your End-of-Month total (income minus all spending) at the bottom. As the purpose of a budget is to allocate your money, you should not go over your amounts. If you do, you either haven’t budgeted enough for that category or you need to rethink your spending habits, but whichever you do is up to you. 😉
There are many great budgeting apps for your phone, as well, if you prefer to do this on your phone, tablet, or computer. All you need is your budget categories and the amounts allotted to each. The most important thing is for you to find a system that works for you to help you allocate your money.
Budgeting does not have to be hard. That being said, budgeting doesn’t happen by accident, and with a bit of work and time, your budget will become your friend and your money will start working for you.
If you are having a hard time getting your budget to match your income, or you just need some good, solid money advice in general, I recommend reading Dave Ramsey’s Complete Guide to Money.
Ready for the next level? Read about when to save, when to spend, & when to invest here.
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