How to Create Your First Budget

I am so happy that you are here. I’ve obviously done something right to convince you that you NEED to take some action and build your first budget. If you didn’t catch it, and still may need a little convincing click HERE to catch my post on WHY you need a plan for your money. I’m working hard to dispel all of the myths around budgets. I am here to help you learn to build one and then get you to love it! Not convinced that you could love a budget? Stick with me and I’ll do my damndest to get you there.

 Today, I am going to walk you through how to create your very first budget, in way less time than you think it will take (unless you are super detail-oriented, then it will take you a little bit longer)!

First up, you have to decide what method is going to work for you. Maybe you’re more comfortable with paper and pen (or pencil) or maybe you want to skip the math step and use a spreadsheet that does it all for you. The method doesn’t matter, the action of starting does. If you fall into the spreadsheet category, click HERE to get access to my free budget template. If pen and paper works better for you, you may still want to jump in and get the template so you can review it to help you see what you may be missing. Whatever method you choose, if it doesn’t work, switch it up. You’re the boss of your budget and it needs to work for you.

Okay, now it’s time to pull up your sleeves and get to work to understand your income and expenses. You are again faced with two options. This time the options are for how you figure out the numbers for your first budget. How you choose is based on how much you love the details.

-If you are a very detail-oriented person, you can go back through 2-4 months of banks and credit card transactions to determine what you have been spending. If you choose this method, I recommend choosing months throughout the year, not the last few months as expenses fluctuate throughout the year. Use the information you collect to get your averages as your starting points.

-If you are less detail-oriented and are crunched for time, start with numbers based on a reasonable estimate. If there are a few that you are really stuck on, check out a few months of spending. This will drive the detail-oriented people crazy, but remember, it needs to work for you!

 Now it’s time to take a step back and see where you end up. To do this, having a picture of the full month lets you see where you stand. If you are using the template, you’ll see this easily. If you are using pen and paper look at your calculations for an overall month. The important number for your month is if you have a surplus or a shortfall. If you have a surplus, it is time to give that money a home each month, so it doesn’t disappear. If you do not have an emergency savings fund, that is a great place to put it! If you have a shortfall, it’s time to go back to work. You need to increase your income, cut expenses, or both. You need to be ruthless with making these decisions, having a budget shortfall each month will come back to bite you in the ass quickly if you don’t take action. Not sure where to start? I’ve recently started a highlight on my Instagram just for this purpose. Head to my IG page (www.instagram.com/moneymindsetfc) and check out my money saving tips highlight. Getting creative with how you can increase your income can be very beneficial. Can you start a side hustle doing something you love, take on a few more hours at work or pick up a part time job? Get creative to get your budget to balance! You can do this! It won’t be easy, but it’s also not easy increasing your debt every month!

 Here is the biggest piece of advice I can give you, as you start your first budget. You are going to screw up! You are going to miss things. You are going to have a hard time sticking to your plan. Not very motivating is it? I want you to know that it is going to get harder before it gets easier. It’s like Marie Kondo-ing a room. It gets messier before it gets organized because you pull everything out of the closet. Your money is like that too, messier before it gets organized. So, stick with it and it will get easier. The first 3-4 months are the most difficult.

You’ve built your first budget, now what? It doesn’t end with building your budget, you have to dedicate some time to checking in on how you are doing regularly. It needs to be pretty frequent initially, AT LEAST once/week, maybe even once/day depending on how often you need a reminder of you plans. When you check in, compare your spending to your budget. Is it week one of the month and you are halfway through your monthly grocery budget? Time to pull back and get creative for the rest of the month. These check-ins are the backbone to getting your financial shit together. You can’t build a budget and then let it collect dust. It needs to be a tool that you are using regularly and adjusting as needed to help you continue to make forward progress financially.

If this feel overwhelming and you are looking for more support and guidance, my online course is perfect for you. I walk you through how to build a plan and put systems in place to make it easy to stick to the plan. This course will help you build a budget that you will stick to. It will help you feel in control of your money and confident if your plan. CLICK HERE to learn more.

I’m so freaking proud of you for taking steps to change your financial future! Happy budgeting.

-Sherry