Your First Budget - Easy Budgeting is Best
Budgeting is easier said than done most of the time. It is easy to get to the end of the month and wonder where all your money went. How do you fix that? You tell your money where it should be going. The easiest way to do this is to look at last months bank statement and breakdown where you spend your funds. No judgement, no mistakes have been made. This is information gathering only. You can not start this journey feeling bad about yourself and what position you are in. This is a judgement free zone, including judgement of yourself.
Once you have opened your bank statement, or banking app go to the 1st of last month and let's get started! Pull out your budget sheet, you can download one specific for military pay here and start by noting the bills that will not change. This includes things like mortgage/rent, car payments, savings, insurance, Netflix, internet, whatever bills that do not change every month. Go through the entire month, once you are done, you will see that these probably make up the largest portion of your monthly spending.
Next start back on the 1st of the month and write down the things you must purchase, but the price varies each month. Examples of these expenses are, gas and groceries, credit card bills, and pet care.
Last, go through and add up anything that you had not listed before. These are varying cost and change every month and can be cut if needed. These costs will include eating out, coffee shops, date nights, whatever else your money is being spent on goes here.
Once all of these figures are tallied you have a good place to start your new budget.
Take your figures for fixed expenses and add them to your new month's budget. The figure for variable expenses is a good estimate to start with the new months. Did you have enough for your purchases? Do you think you overspent last month? If the answer is yes to either adjust the figure to what you would like to spend. The money left over that you have not allocated is your discretionary money.
At the beginning of next month go back over this month and revisit your purchases again. Were you able to update your variable expenses to meet what you had budgeted? If so, fantastic! If not, it is time to make proactive changes. This month you have to track your expenses as they happen. This way you will know before you go over budget and make the adjustments needed.
After these three months you have a good idea of where your money is going. You have done the hard part. I am so proud of you! Taking a hard look at where your money is going is the hard part. Now there are numerous options for how to breakdown your budget. A few examples are 50/30/20 or zero-based budgeting.