5 steps to getting started with the “B” word.
It seems the most difficult part of any task is taking the first step. I know in my own life I was notorius for not getting things started because I didn’t want to start things I knew I could not finish. Talk about rationalization!? Geting started on a budget is no different. What convinced me to get started with a budget? I finally wanted a real quantification of where my lifestyle stood against my income. And I was off…..Here are some “real” steps involved in kicking off your budget so that you won’t give up the first day.
STEP 1- Track your Spending and Income – For the first month, you should just track your spending and income. Many online banking sites will let you export your banking transactions and just keep notes on a notepad for any cash transactions. This will help you in two ways. It will begin the process of thinking about where your money is going. (in my case, the part of the brain that controled this was very weak and this was a great way start to beefing it up). Secondly, you will use these numbers as a starting point for your budget categories for the next month.
STEP 2- Create categories – After you have a whole month’s of expense, come up with categories that best fit your expenses and assign them to the dollars spent. This will help you really see the priorities of your money. I used the categories from Dave Ramsey’s Total Money Makeover Plan which just seem work for me. I think the adage “the simpler the better” works best.
STEP 3- Create your First Budget – The first 2 steps should basically this step a breeze. Use the money you have tracked and the categories you have assigned them and now take your “stab in the dark” at what you will put in your budget for thie future month. Make sure every dollar of income you have gets “spent” in your budget. Also, remember every budget is different. Some months you just have different expenses. The key to good budgeting is remembering you have a Big Birthday Bash Dinner at the end of the month and to account for it.
STEP 4- Use the Budget – Now you have your budget, the hard work is done. Enjoy the feeling. You don’t have to check your account to make sure you can pay that mortgage. You already had it planned. You don’t have to sweat that birthday party next Friday. You already budgeted the gift. Now you will have problems, especially early on the your budgeting life, which leads me to the final step……
STEP 5- Forgive Yourself – You must forgive yourself when you make mistakes like forgetting that HOA fees are due half way through this month’s budget. Everyone makes budgeting misakes and no budget is perfect. You WILL be adjuating your budget throughout the month, every month. If you learn to forgive yourself and learn from your mistakes you are well on your way to being an A+ budgeter. It generally takes at least 3 months of trial and error before you feel comfortable. At least it did for me.
What is Freefromdebtguy.com?
Welcome to my new website. I have decided to go public with my commitment to being debt free as well as educating as many people as possible the power of debt free living. I hope to be able to share with you our successes and our failures. Our breakthroughs and our breakdowns. Maybe I can help someone out there who is confused like me.
A little about me. I am 33 years old with a wife and 2 small children ( ages 4 and 5). For the first time in my life, we are in control our families’ finances. I was married at 23 and even before that I was clueless how to pay bills and how to get ahead with money. I was in a seemingly endless routine of paying bills by the seat of my pants. I was the one in the marriage who paid the bills and “balanced” the check book. (that part actually makes me laugh!) It is actually amazing how we made it without some catastrophic economic emergency blowing us the edge. I guess I am fortunate that I “woke up” before that happened. What I also noticed (this may be unique to me) is I have also decided to take control of other facets of my life. This includes my health. I have managed to lose 20 lbs since beginning to take control of my finances (and my life really.) I think I attribute this to me a new found sense of accountability for things instead of me thinking that stuff just happens to me. In short, I am better about not making excuses than I was previously and that has made a big difference.
So what inspired to make these changes after 32 years of typical habits. Well, I was at work one day and just happened to listen to The Dave Ramsey Radio show. Now, I had heard him before and it never really struck chord before. For some reason, one of his points he was making to a caller connected and I was hooked. One of the the things that really made me listen to his show was his brashness to his callers. It was that form of tough love I really liked. I was also very intrigued by his envelope system for budgeting things such as eating out or groceries. So to make a long story short, I went home that day and signed up for his Total Money Makeover online web-based subscription which included his budgeting software, his TMMO book and an envelope starter kit. I was in uncharted waters and it felt right.
This website will follow my families journey. I think it will be an interesting one. So please come join me…….
Bill Nash
FreeFromDebtGuy@gmail.com
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