5 Easy Steps to Budgeting

Learning how to live on a budget doesn’t have to be complicated. If you have ever been on a diet to try to lose weight, you have done a budget. If you have ever managed your time, you have done a budget. Money really is no different.

When you are trying to lose weight, the goal is to become more intentional about how you eat and your physical activity. You’re essentially budgeting the fuel that you’re going to give your body to live and thrive.

When you are trying to manage your time to become more efficient or do more of the things you want to do in your life, the goal is to become more intentional about how you spend your time, so that you can fit in the things that bring you joy.

When you’re trying to manage your money, the goal is to become more intentional about how you spend your money, so that you can use your money for the things that you really value in your life. Those things could be traveling, giving to your favorite charity, buying a home, working less. You have to decide what is most valuable to you – then you have to direct your money there. 

A budget is all about deciding ahead of time what’s important to you and then making sure that’s how your money is spent.

Here are some easy steps to get started budgeting. You will want to complete your budget each month before the month begins, then monitor it, along with your spending, throughout the month so you can stay on track.

(1) Decide how much income you will have each month. If your income is irregular, this can be an estimate or it can be the minimum amount that you have earned in a month in the past year or so. Include all sources of income, like rental income, alimony or child support, sales of things you own, etc. — any money you expect  to receive in the coming month.

(2) Decide how you will spend each and every dollar that you have estimated in step 1. Assign every single dollar a spending category until you get to a balance of $0. As a simple example, if I expect to have $4000 in income next month, I might assign it like this:

      • $1,000 Housing
      • $500    Food and eating out
      • $200    Utilities (electric, water, etc.)
      • $200    Gasoline/transportation
      • $100    Entertainment
      • $300    Insurance
      • $100    Gifts and cards
      • $500    Savings and Investing
      • $500    Tithing and giving
      • $100    Clothing, Shoes, etc.
      • $200    Personal care (hair, nails, cosmetics, personal hygiene, etc.)
      • $300    Sinking fund (saving for big ticket items, replace car, etc.)
      • Total Expenses = $4,000

If I add up all of my assigned category amounts for expenses and get to a number at the bottom that it is not equal to my estimated income, then I need to adjust how I have the income assigned until I get to the same number. So my income minus my expenses = $0

(3) Throughout the month, track your spending. Every time you pay a bill or spend money, capture it and assign it to the category in your budget. There are a wide variety of ways to handle this and the one you choose only needs to work for you (and any other decision makers in your household). It could be a notebook if you’re old school and like the paper, an Excel spreadsheet or Google Sheets, money management software like Quicken or Quick Books budgeting tool, or one of the many apps like Every Dollar, Mint, YNAB, etc.
It’s important to capture every dollar you spend or pay out, whether by cash, debit, credit, check, etc.
Also capture all of your actual income as you receive it.

(4) Review how your money performed. This is like a performance review at the end of each month. If you gave your money a job of savings and investing, did your money do that job? Did you save what you said you would save? Just compare how you assigned your money to how you spent your money.

(5) Learn from each month and learn how to be more intentional each month. It takes a few months to get in the habit of tracking your income and your spending. It takes a few months to become more intentional with your spending and learn what works and what doesn’t. Give yourself some time and some grace. Don’t judge yourself – just learn from it and move on. Set some goals for your money and help your money achieve those goals. Above all, the purpose of a budget is to help you be more intentional so that you can achieve your financial goals and you can live out the future of your dreams.

If you want to learn more about budgeting and becoming more intentional in all areas of your life, I would love for you to connect with me and others that I have helped become more intentional.

#5EasySteps #JillTheMoneyCoach #Budget #BeIntentional

Twenty years ago, Jill Wright was in debt and living paycheck to paycheck. Through focus and hard work, over the years she and her husband built a nest egg that allowed them to retire in 2018 at ages 50 and 53.

Jill heard God’s call to help other women repaint their own financial future and was eager to answer it. She left her corporate job and became a Financial Confidence Coach. Jill loves helping women give up shame around spending so that they can stop stressing about their money.

She helps strong generous women go from feeling weighed down by their finances to feeling in control so they can focus on being present with their family and building a life they love.