Build Your Budget 101

For some, budgeting may bring about feelings of insecurity and the idea of limiting what one can spend of their OWN money may feel ridiculous.  The truth, however, is that so many people have experienced FREEDOM in budgeting.

Myth:  If I make a budget, I'll have to set aside money where other people have suggested (savings, tithing, etc), and I won't be able to control where my money goes.

False, You are in charge of your budget, and you are in charge of where your money goes.  Budgets are extremely customizable, so feel free to make yours fit your needs.

Myth: If I use a budget, I won't be able to buy the things I want.  I'll have to adhere to someone else's goals and ideals.

False, the whole idea behind budgeting your money is that you CAN buy the things you want.  We'll show you how to customize your budget so it fits YOUR goals and ideals.

How To Create A Budget

1. A budget is useless if you don't have any goals - so, set your goals.  Like budgets, goals are personal, so think about what YOU want.  For example, do you want a new car?  A down-payment for a new house?  To pay off a credit card or debt?  To go to college?  A vacation?
2. Next, you need to calculate your incoming and outgoing expenses.  You can do this by using a general worksheet like one of these or you can simply write them down on a piece of paper or in an Excel document.
3. Take a look at your "Outgoing Expenses," and figure up which ones of those are necessities, and which are "extras."  Highlight are separate those into different columns.
4. Subtract what you make by what you spend.
5. Use the total from #4 to decide how you want to approach your goal.  You may want to work towards your goal slowly, giving yourself a lot of room for "extras" - like "fun money", emergency savings, etc.  Or, you may want to save any extra money you get.  It's entirely up to you!

Budgeting Tips

• Mint.com can help you keep track of your finances.  Think of it as a personal checkbook keeper that notes your transactions and fits it into your budget so you don't have to!
• Budgeting can be as simple as keeping track of your expenses in a cellphone app as you get a receipt at checkout.
• For our family, we prefer to list bills only under our "necessity" column because they never change.  Then, we put a food, toiletries and supplies, and miscellaneous section up that is adjustable to our current needs and budget.  For us, this helps us feel like we have more control of our own money, and we "allow" ourselves to spend (however we want) any extra money from those sections that hasn't been spent at the end of the month.
• Use websites such as smartypig.com to help you reach your savings goals.  --It's a cool website where you can track your progress and invite people you know to watch (and contribute), too!
• Reward yourself.  Don't make budgeting a chore (or you may stop), instead factor in some "fun" money that you can do with what you want.
• Be adjustable.  If your budget stops meeting your needs, change it!
• If spending money is too easy for you, try the "envelope method", where you divide up your budgeted expenses into labeled envelopes and fill with only enough cash to meet your budget.  For some people, it's harder to spend cash that's clearly labeled than to swipe a debit card.
• Get creative!  Clip coupons, watch sales, and offer trades for services to help your budget last longer.

Tell us, what are your budgeting tips?  Have any useful information or resources?

Or... any questions?  Leave a comment, please!

---

---