It’s hard to start a lot of things. It’s always hard to start a new job or try to start a new habit. It’s no different with starting a budget, but everyone has to start somewhere.
I am sorry to say that there is no one-size-fits-all budget. I have been through multiple websites, books, spreadsheets, paper-pencil budgets, etc. and I am still tweaking my budget almost yearly. If you are starting from scratch and have no idea what to do, I would recommend tracking your every expense. (And when I say every, I mean every… pop, candy bar, coffee, etc.) I have heard from people that they have no idea where their money goes. I was once one of those people as well. I didn’t go on elaborate shopping sprees or buy large ticket items, but my money seemed to disappear each month.
After a month of tracking your expenses, it will give you a good idea of where your money goes. You can find where your financial drains are. My financial drain has been and continues to be eating out. It is something I struggled with when I was single and also now that I am married. I enjoy eating out, but enjoy more the fact that I don’t have to cook when I eat out. This is not good at all for our wallets. Our money slowly disappears one meal at a time.
I think the hardest part of figuring out your budget is deciding how much money to allot to each category. This is a personal decision and it will take tweaking. A lot of people feel that a budget is set in stone once they make it. They don’t feel as though they have any wiggle room. You can make a budget be whatever you want it to be. After tracking expenses if you found that you spend $50 on coffee each month and are ok with that, then put $50 a month into your budget for coffee. If you aren’t ok with that amount, then lower to what you feel is best.
A lot of people feel that if they are spending something that may not be a necessity, they need to cut it out completely. I can tell you that if you go from spending $50 a month on coffee and try to cut it out to $0 a month, you are most likely setting yourself up for a failure. If you eventually want to get it down to $0, then decrease it each month by $5 or $10. Extreme changes to your personal style will only set you up to hate your budget. Extreme changes may be necessary if you lose a job or have a major life change, but for the average person who is just trying to start a budget, it will make you resent your budget.
The best part about a budget is that you can personalize it. Hubs and I have our own “allowance” in our budget called MAD money. We each get $40 a month to spend however we want. We can save it from month to month and eventually buy something big, or we can piddle it away on small things all month. It is our personal money and can be spent however we want. We do not have to discuss how we spend our money each month. It is ours alone.
I can only speak from our budgetary position, but Hubs and I do have a joint account and our money is all shared. We do not split our money or have separate accounts to figure out how much each person owes for something. As a couple, you have to make that decision on your own. If you prefer separate accounts, then you can make a budget just for your account. Figure out how much you need to put towards the joint categories (bills, rent/mortgage, pets, food, etc.) and go from there.
Since Hubs and I are trying to get out of debt, that is where the majority of our money goes each month. We do not have a lot of wiggle room in other areas of our budget. We use an envelope system for some categories, as I do not trust ourselves to keep it in an account and not touch it. Our categories are pretty slim right now, as we are trying to save and pay off debt at a rapid rate.
One question that you do have to figure out for yourself is how much should be budgeted each month. There is no easy answer. Here is a compilation of a few websites that may be helpful in answering this question, but in the end it is up to you to decide that.
Budget Percent Calculator
Spending Plan Online Calculator
Once you figure out your percents and how much will be budgeted in each category, it is up to you to do the next part. Stick to it. It is the hardest part of the budget, and the one that burns a lot of people out. I try to update my expenses each week to see how it is going. We still struggle with certain areas of our budget, but it is an ongoing process and will continue to change as our lives change.
I do need to let you know that I am in no way a financial planner. I enjoy numbers, math, and balancing budgets. I have no background in giving financial advice, so whatever you take from this post, you are taking at your own risk.
Bandit says to get to it and start that budget! And don’t forget the pets category… we need food, treats, toys, and yearly vet bills covered.