Personal, Monthly Budgeting Made Simple

On the last few days of the month, when you’re living without a budget, things can get a little sticky. Out of snacks? Gotta wait until pay day. Need to buy more toothpaste? Squeeze that tube like your life depends on it, friend. Out of toilet paper? Ok, please if you budget for nothing else, make sure you have enough toilet paper each month. Coming up short at the end of the month is no fun. One of my awful but most memorable pre-budget memory is having my electricity turned off while I was working on a mid-term paper that was due in just a few hours. I was working on my desktop computer—yes, I had a desktop in college—and the electricity being turned off was a wakeup call that wasn’t fun. I called my mom in a panic (asking why she forgot to remind me to pay my own bill) and she informed me that this was going to be a valuable lesson she knew I needed to learn. I’d like to tell you that I learned how to budget immediately after that experience and that my financial health quickly improved. That is not the case. I spent a lot of my early twenties struggling to live within my means without knowing how to use a budget template. I definitely didn’t have a budget spreadsheet, there were no lists of my bills, and I didn’t know how much money I could afford to pay for gas each month. I just drove my car and my life until I was running on financial fumes.

In my mid-twenties, I found myself knee-deep in debt, living way above my means, and flat out freaked out every month. Even receiving money was kind of scary because I knew I had no control over where it would go or what would happen to it. I hope you can’t relate. I really do, but if you can let’s have a chat about budgets. I know, I know, budgets don’t sound fun. They sound restrictive like wearing a girdle on a hot summer day restricting. I started my new journey with a simple budget template and never looked back. I promise you that living on a budget can be one of the most freeing feelings in the world. Controlling your money and not letting the money, or even the lack of money, control you is a game changer.

Commit to a New Budget and Lifestyle

So, let’s get back to the basics, shall we? The first step to creating a budget is to take a deep breath. Seriously, take a deep breath and just commit to yourself that you want to create a change that will improve your life now and in the future. Living life on a budget does not mean sitting at home all day and feeling envious of your friends who get to continue paying their monthly homage to the shopping and brunch gods. Before we go too far, assure yourself that making room in the budget for fun is part of the process and it’s even recommended by experts!² In fact, some financial experts recommend the 50/30/20 budgeting rule which allows for setting aside 30% of your income to spend on things that make you happy! The key is to control the fun and choose strategically how to spend your resources and to avoid feeling the burn later when you open yet another unthinkably large credit card bill.

Committing to a new lifestyle isn’t easy, but it’s a decision that will pay off in the long run. When you decide to work on your physical health, taking one little action step at a time can make a really big difference on your fitness journey. You may choose to cut out fast food for example and then add in exercise a little bit later. Your financial health is no different! Cut out a tiny expense that you can do without or decide to lessen the frequency of that expense. One dollar at a time, you can control your spending, live within a budget that you designed, and finally claim your financial health. Once you’ve lived with the peace of mind that comes when you know where your money is going, you’ll never turn back.

Assess Your Current Spending

Getting into the frame of mind that prepares you for a major budgeting overhaul is the first step, but the next, equally important step is to assess your current spending. You can’t navigate to new territory if you don’t know where you are starting. Look at every transaction you’ve made over the course of two to three months and create an assessment of your monthly spending.¹ Knowing how much you earn and how much you spend will help you fill in a budget worksheet which you can use to build and manage your budget. The Speedy Cash team created a Monthly Budget Planner for you to use which serves as a budget template for monthly use.

Start your assessment by breaking down your past spending into categories to get a good picture of the categories that may need work. Some categories will remain the same as they are not flexible. Anything that is not a necessity can be assessed and potentially changed. Your next step will be to identify which of your expenses are fixed and which are flexible.³ Understanding where you have room for improvement will help you stick to your plan after creating your personal budget template using the Monthly Budget Planner.

A few examples of expenses you may see reflected on your budget worksheet are:

Examples of Fixed Expenses

• Rent or Mortgage
• Renter’s or Homeowner’s Insurance
• Health/Life insurance
• Prescriptions 
• Car Payment
• Car Insurance
• Child Care/Child Support
• Tuition/fees
• Loan Payment
• Cell Phone
• Internet & Cable/subscriptions
• Utilities (like electric, gas and water)

Examples of Flexible Expenses

• Groceries
• Restaurants/Meals Out
• Bank or Credit Card fees
• Savings
• Gas for car
• Public transportation/Taxis
• School supplies/costs
• Health/hygiene products
• Entertainment
• Clothing/Shoes
• Laundry

Now, it’s time to put your data to work and create your own personal budget!

Utilize the Speedy Cash Monthly Budget Planner

You know how much money you make each month, and you’ve determined exactly how much you’ve been spending. Now, it’s time for the fun part. Start plugging numbers into your Monthly Budget Planner which will act as your budget sheet template. Create goals for yourself as you move numbers around by considering how much money you can allocate for debt repayment or any other pressing financial demand.

As briefly mentioned above, many people turn to a 50/30/20 spending plan² when creating a workable budget for their household. Using this method means allocating 50% of your monthly income to the things you need or your fixed expenses, 30% to the things in the budget that you want but are not vital to survival, and 20% should be allocated to building your savings account and paying off any debts you owe. This method allows for flexibility and makes it possible to reach your financial goals while still meeting your needs, many wants, and taking care of your future.

Keep Going, One Day at a Time

Making changes to your spending habits isn’t easy, and it can start to feel overwhelming at times. Take each step slowly. You can start to recognize when overspending is avoidable by also paying attention to times when you spend money because you are dealing with emotions or in response to the things going on around you. Spending money in a way that corresponds to your emotions or “shopping your feelings”⁵ as some people call it is fairly common. You can avoid this budgeting mistake by taking the time to identify when and why you’re doing it. The next time you find yourself making an unplanned trip to the mall or to your favorite spot to splurge, take a moment to ask yourself why. Try going out for a walk or making yourself a cup of tea. Take an hour to process the motivation behind the shopping bug that just bit you before you go through with purchases that could derail your well-laid budgeting plans. As you work to find ways to save money, you will likely have more money for the things in life that make you happy including those sporadic unplanned shopping trips.

You’re on the right track. By downloading your Monthly Budget Planner, you’ve committed to a new way of life and money habits. Keep in mind that sticking to a new budget takes time, and you may fall off the wagon once or twice (or in my case maybe about a hundred times). Keep going. No matter how hard it is, no matter how much you want to buy that new outfit, no matter how many times you make your own coffee instead of swinging through Dunkin’ on your way to work. Just keep your future in your line of vision: a future where money and budgeting don’t intimidate you but instead make you happy. Financial habits that are implemented now can grow into a lifetime of financial health and peace. And that’s worth the effort, I guarantee you.