Now it’s time to do something with your spending info. You should have them all categorized and ready to create a budget. Yes I said the dreaded “B” word. Don’t worry I’m going to make this easy and painless for you I promise.
Do I really need a budget?
Yes…you do. You’re just starting out and not having a budget hasn’t helped you so far so you need to try something new and use a budget. Later on when you have a better grasp of your spending you can wean yourself off a budget. But not until later so don’t get ahead of yourself. What you need to do now is focus on not spending a lot of money so you need some boundaries.
What should my boundaries be?
Well I would suggest not choking yourself by setting your budget too low. You need to slowly get yourself to an acceptable level to have the best chance of staying on a budget.
You know what you spend now so unless you are in dire straits you should cut back at around 10-15% for each category. So each month cut it back another 10-15% until you feel like it’s IMPOSSIBLE to go any lower. I emphasize impossible because you already probably think it’s impossible to cut back any of your spending. It’s not, and you should know that if your mind is in the game. Sacrifice will create extra room to cut back.
What kind of budget should I use?
One that you like. It’s as simple as that. You want one that is easy for you and will keep you wanting to continue. There are a lot of different types of budgets out there. My personal favorite is the Zero Based Budget because it accounts for every dollar.
There are also lots of computer/online based options, that have different types of budgets, like:
I personally prefer Google docs mainly for the fact that you can access it anywhere and because I’m a big fan of Google.
And of course you can always just use a pen and paper to budget your money. That’s what I prefer to use because it’s so easy to pull out my pad of paper and go to town.
Once again use what you like. There is no one size fits all so use a budget that works for you. Mix and match if you want, whatever it takes, just as long as you keep it up.
I prefer pen and paper and the zero based budget, What kind of budget do you use?
P.S. Some of the links in this post I earn a little bit of money from so I can pay my bills. But I promise to never to intentionally lead you to a bad company and to never let the money affect my opinion.