How to Set Up a Budget

Photo by Karolina Grabowska on Pexels.com
You want to budget your money, but don’t know where to start? Let me help!

I am truly excited to share with you how easy it is to start managing your finances. I strongly encourage you to start now because the more money you can set aside to save, the closer you will be to…

  • Having a vacation
  • Having money for retirement
  • Having money for a puppy (or whatever you want)
  • Feeling confident and organized with your money

These are just a few reasons why it is important to start budgeting.

6 easy steps to get started:

  1. Set realistic financial goals for yourself. Without a reason, you won’t do it.
  2. Decide where you will budget. On an app, Excel, Google Sheets, or in your notebook? I use Google Sheets. See my budget templates here.
  3. Write down your monthly income and total monthly expenses. Income minus expenses equals net income.
  4. Decide which expenses you could reduce, or, find ways to increase your income instead of cutting expenses.
  5. Make a monthly routine for budgeting. Every time you get paid, you need to look at your bank account app or receipts to track how much you spent and how much you made. This should be an ongoing, biweekly, or monthly activity you do.
  6. Track your progress. Especially at the end of the month, it is very important to look at how you did.
Where should I put money left over?

You need a safe place for your savings, so open up a savings account within your bank. Basic savings accounts are great because you can easily access the funds when needed. If you are a student, look to see if your bank offers student bank accounts. They usually do not have any annual fees.

Another option is to open up a HYSA, also known as, High Yield Savings Account. This is a bank account with higher interest rates. Look online to compare the options, but be sure to check that they have no annual fees, or hidden fees. Learn more about HYSA’s here.

The next step beyond a basic savings account is opening up a retirement account. With a retirement account, you won’t touch the money and you will add to it over time to build wealth. I save with Vanguard and have a Roth IRA. There are other options like having a 401k, or a traditional IRA. IRA stands for Individual Retirement Account and is a tax-advantaged retirement account for after-tax dollars. The Roth IRA does not pay interest however, you have to pick the investments. This takes more time to learn about so I will link my favorite, reputable finance website to touch more on this subject. See link here to learn how to fund your Roth IRA. (I live in the US so not all products or services may be offered in your area.)

Learn the difference between IRA & Traditional IRA here.

How I budget on Google Sheets

I used to be so disorganized. I had no idea how much I was making per month, and I also didn’t know how much my expenses totaled. I didn’t even have a savings account. I made no progress with saving money. It was not working.

After going to school and paying for everything out of pocket, I realized I needed to know exactly how much I could afford. So, I made a list of all my expenses and started managing my finances every time I got paid.

This is how my budget is set up on Google Sheets.

Why Google Sheets and Excel are great tools to use:

Another reason to use Google Sheets or Excel is to get familiar with it. Many jobs require you to have basic skills using either. They even have formulas that can do the math for you. Use my budgeting templates today!

Conclusion

  • By budgeting, you will be in control of your money
  • You will become excellent at managing money
  • You can start saving for your emergency fund or sinking fund
  • You will feel more confident with your money

If you enjoyed reading this blog post, feel free to support this blog via my Buy Me a Coffee page!

Legal Disclaimer: The nature of this blog is to educate and inform based on the opinion and experiences of the author and should be taken as such. The information and ideas found on this blog are opinion-based and these opinions do not reflect the ideas, ideologies, or points of view of any organization affiliated with this blog. The information on this blog is authentic to the best of my knowledge, and as such, it is prone to errors and the absence of some key information. The content on this blog is generated for entertainment and informative purposes and is not intended to be perceived as professional advice in regards to health or finances, or any other field.

Published by Dana Johnson

Hi, my name is Dana and I help teach the value of budgeting & saving early on in life so you can achieve your financial goals.

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