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Budget – Where do I start?

Just like a diet, crash budgets do not work. You should start out a budget slow. I want you to look at one month and commit to changing some habits for one month. Evaluate your spending first. Then, decide what area you want to work on.

  1. What is your focus? I will always talk about this. You need to notice one particular area that you want to work on. You will see more progress if you focus on one area of your finances at a time instead.
  2. What category of spending could you cut back on? I want you to find ways to cut back on your overall expenses by 10% for the first month. Do you spend too much at the grocery store? or on coffee/drinks? or eating out? I’m not saying you can’t continue to enjoy those things but if you have long-term goals you need to cut back for a time.
  3. Use the extra money as soon as you receive it. If you’re planning to put $50 in savings or pay $50 extra on your debt from a paycheck, you should do it as soon as you get paid. Online transfers and online bill pay make it easy to send extra payments as soon as you have the money.
  4. Use the cash envelope method to manage overspending. If you struggle with just spending the money on your credit/debit card, the envelope method works well. You take the money for each spending category out of the bank and put it in an envelope. When the cash in the envelope is gone, you don’t spend any more money.

Always keep your focus in mind, cut back a little, use the extra money as soon as you receive it, and then use the cash envelope for not overspending. Don’t try to say you’re not going to enjoy things or spend any money until you pay off debt, build savings, etc. Putting too many restrictions on yourself especially if you’ve been overspending, will make it very difficult to stick with a new plan.

I offer budget evaluations for free for a limited time. I love to help people get their finances back on track. I will make a spreadsheet that shows you how much you’re actually spending in each area. Just seeing where your money is going is the first step towards changing your financial outlook.

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