Budgeting Tips for Beginners

Most of us want to budget but budgeting seems complicated and time consuming. I even found myself looking for apps to make it simple but could never find the perfect app. With most apps you have to link your bank account and put a lot of energy into categorizing purchases to find out how much you spend where to adjust your life in a particular area. That seemed to be more time consuming than just figuring it out on my own. 

I took some time out and said to myself how can i make this easy enough for me to actually want to do it but accurate. First thing I decided to do was to break my income into three accounts; bills, saving, and spending. Then I had to figure out how much I needed to put into each account. So boom, I needed to know how much I was spending in bills but I wanted to break my bills out by bills I had to have (rent, electricity, car note, etc) and flexible bills, meaning the bills I can remove if I needed to save more money (netflix, amazon, spotify, etc). After I figured that out I made a list of income and I broke out all of my income by source (job, uber, roommate). From here I had all of my answers. 

See the image below to understand how I broke out my budget.

Budgeting .jpg
Budgeting .jpg

As you can see I have a column for my bills, other bills and income. I break each item I’m paying out by name, list the amount and total the column at the bottom. 

Let’s say you make $3,000 a month

Rent/Mortgage – $500

Electricity – $100

Car Note – $300

Internet/Cable – $100

Total – $1,000

Spotify – $25

Amazon – $25 Netflix – $25

Squarespace – $25

Festival Payment – $100 

Total – $200

I add the bills total to the other bills total which becomes the bills total then subtract that from my income total to have my total non bill money.

$1,000 + $200 = $1,200, $3,000 – $1,200 = $1,800

I divide my totals by the amount of times I am paid monthly. If I am paid twice a month, I will divide by two and if I am paid once a week I will divide by 4. Easy enough? So, if you are paid $3,000 a month but you are paid twice a month you will have $1,500 each paycheck. Our bills total is $1200 so we need at least $600 in our bills account

From there I can calculate how much needs to go into what account. 

Bills Account – Total Bills amount/2 + cushion ($50)

$600 + $50 = $650

Saving Account – I save something every check even if its $5 but try to get up to $100


Spending Account – Remainder 

$1,500 – 650 – 50 = $800

To make sure I am constantly adding more to my savings account, I roll over any left over money from my spending account. So, anything that is not a bill I use my spending account (groceries, gas, going out, shopping, etc). At the end of the pay period I roll any remaining money in my spending account into my savings account and start over. I try to live off of my check for that pay period. If I wanted to use the money in the savings, I do! 

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