At the end of each month, I sit down and write out my budget for the next month. As I sat writing out April’s budget, it occurred to me that few people actually live according to a budget.
I feel like our society today is all about instant gratification and living well beyond our means. (YOLO, right?)
I mentioned the other day that Bekahnomics really means how I use my scarce resources. I don’t bring in a lot of money while I’m building my clientele, but I’m able to make sure all of my bills are paid because of a written budget.
Dave Ramsey says that a budget is simply you telling your money where to go. You are allocating where you are going to spend every dollar you make.
Never created a budget before? I made a sample budget below.
First, you write out your income for the month. You may have multiple jobs or multiple sources of income each month. You will total up all of those.
Then, you write out all of your expenses for the month. You will probably have many more expenses than the sample budget. Try to think through every expense you have- mortgage or rent and utilities, car and associated expenses (gas, insurance, oil change, etc.), monthly debt payments, even food and spending money.
Next, you subtract all your expenses from your monthly income. You want to allocate every single dollar you bring in, so you will probably have to revise your budget to do so. You may find that you are spending more than you are bringing home. That means you are overspending. In that case, you may have to make some budget cuts to make your budget equal zero.
Now, you’re going to use this written budget as a plan for how you are going to spend the money you make.
I take it a step further and break down my income and expenses by pay period.
Then, I break down my budgeted versus actual. I round the numbers on my budget, so I like to have an actual column to break down everything to the penny. I use this breakdown to pay bills, withdraw cash for certain expenses, and transfer the remaining amount to savings.
Feel free to message me if you have any questions. There are a lot of great youtube channels for budgeting as well.
This is just how things work best for me with budgeting. It makes my life a lot less stressful having a plan to make sure all my bills are paid.
Any tips for living on a budget? Do you do your budget a little different? I’d love to hear!