Budget lady


I hope if you are reading this post, you have already read my introductory post, “Why Don’t I Have Any Money” published on October 28.  If you have not read that post, I would encourage you to read that one first.  The purpose of this post is to take the first steps to gaining control of your money and knowing exactly where it goes on a monthly basis.  Before you read these steps, you are going to take a deep breath and smile knowing you are getting ready to experience freedom where you have once experienced either fear or apathy.

1.Take out a piece of paper. At the very top of the page, write your monthly income.  If you don’t have a good handle on an exact figure, just look at some pay stubs from the previous month.  Give yourself a yoo-hoo!  This is how much you have to spend.  Let’s get to it.

2. Understand your consistent expenses. We will deal first with the “easy” stuff, meaning the bills that are consistent and rarely change.  This will include these kind of bills:  mortgage, phone, electric, gas, water, insurance, etc. One suggestion to mention here is if you do not have your gas and electric on equal payment plans, I would encourage you to do that as soon as possible.  Most electric and gas companies have some sort of plan that allows you to do equal payments.

3. Subtract. I hope you have listed the categories above right under your income at the top.  Now you can just subtract those figures from the top amount. That will give you the income left to spend for the next set of categories. If as the month carries on, you recognize you have forgotten about a particular bill, just add it to the list to make sure you capture that expense.

4. Estimate your “routine” expenses. These are categories such as groceries and fuel. These two categories relate to your monthly bills because for most people once you know your habits, these two categories stay fairly consistent as well.  The big deal here is figuring out your monthly habits.  To do that, you will have to do some tracking.

5. Track your spending. I want you to “guess” at what you think you spend in groceries.  Pull out some portion of that in cash and see how well you know your habits.  As you run out of cash, continue to pull grocery money out to spend.  Our goal in this month is just to learn your spending habits. Fuel is a little harder to do in cash, in my opinion, because most people (including myself) pay at the pump.  That will leave you two choices in order to track this category. You can pull cash out so that you know for sure your fuel cost, or you can keep receipts to track your expenses.

6. Subtract your routine expenses. Once you get a decent handle on the total expense in groceries and fuel, you again need to subtract those amounts from the money left after bills.

We have a few more things to discuss, but that will come in another blog post.  Until that one is published, your goal will be to continue to work on these categories and start to recognize where else you may be spending your money. It will take some time to make this a habit, but it is SO worth it.  If this is all new to you, I want to be your personal cheerleader.  I can promise you as I know personally from working with many clients, that you are making the first steps to gain freedom with your money.  Give this a chance.  It may just change your life!!

By Karina Whisnant