Ep# 52 January is my favorite month of the year because it means new beginnings and fresh new ideas. It’s a time when I don’t reflect on what I didn’t accomplish in the previous year, but rather, focusing on what I do want to accomplish in the current year.
The same goes for budgeting. So in today’s podcast, we’re going to talk about the budgeting basics – from creating your budget to streamlining the process so that you’ll actually stick with it instead of wanting to throw it out the window.
The first tip is to get organized with your finances.
1. Gather your documents
The very first step to creating your budget is to get your income and expenses statements. This may mean logging on to your employer’s website and printing out your paystubs, rummaging through your drawer for those documents or if you are self-employed looking through your client invoices to see what you got paid. If you have an inconsistent income, I recommend printing out at least 3 months worth of statements so you can get a good idea of the average amount you bring in every month.
Then you’ll want to gather all of your expense statements. So this means any bills that you pay for each month. To make this a little easier, start with monthly fixed expenses. So this means rent/mortgage, household utilities, internet/cable, daycare, car payment, and anything else that you absolutely have to pay for to run your household. Next, grab your bank and credit card statements. I highly recommend printing these out and keeping it in a folder because in the next few podcasts, we’ll talk about how we are going to analyze these documents.
2. Write it all down
Everyone has their own budgeting style preference – whether you like pen/paper, spreadsheets, or apps. But if you’re doing a budget for the first time, I highly recommend just getting a sheet of paper and writing it down. This will make it so much easier plus you can keep adding to that list as you find more income or expenses when you go through your paperwork. Once you have it all down, then you can decide if you want to use a budgeting template, spreadsheet, or an app. I also have a free budgeting template that you can grab for yourself and you can access it at https://www.budgetdivas.com/budgeting-template.
3. Automate your bill payments
When we first starting getting our finances organized and started budgeting, I noticed the fees I was paying for late payments.
You can also automate your bills for your utilities. Most companies won’t charge a fee if you’re debiting it from your checking account and some companies don’t even charge a fee for using for your card. The main thing is to automate as much as possible so you’re not having to worry about incurring late payment fees and it doesn’t hurt your credit history.
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