Budgeting:  101 back to the basics

The budget is the one thing that we have total control over. We create it to fit whatever our lifestyle may require. The thing about budgeting it is like looking directly into the mirror.  It will reflect whatever we do. The definition of budget: plan you write down to decide how you will spend your money each month. Where budgeting goes wrong is people assume it is concrete.  Once you change your mind set on what budgeting it is, you will see it is a powerful financial tool.  A budget should be looked at as a monthly goal. Some categories you know for sure what it will be each month.  Usually that is your mortgage or rent, Netflix payment, internet payment, ect. Then you have other categories that are more fluid. We never know how much gas will cost week to week. (Let’s Go Brandon!) We have an idea of what it may cost. Same goes for food, utilities, and electricity. The thing about budgeting is we cannot control the actual cost of some items. It’s been a major topic at how electric rates have risen recently. What we can control is the goal. What I don’t want you to do is set a goal right from the start.  If you have no clue where your money is coming and going you will set unrealistic goals. That will deflate your motivation to figure out budgeting. Your first assignment is on the 1^st of each month you sit down and write out exactly what money came in and where it went for the previous month. There are two ways to do this. 1. You can set up a google sheet which has the capabilities to do all the math for you. 2. You can use a free application called Mint. (Remember tips and tricks to be successful for as little money as possible).   I am giving you a free template of my budget in google sheets. You will need to copy it or save it to your own sheets to make edits. This will save you time. If you want to make things more automatically you can download the free Mint application. Mint can do so much more than just budget that it may require it’s own post. Just like everything I talk about you need to find the system that fits you the best.  There are plenty of other budgeting tools out there.  I have found sticking to simple (and free!) have been the best for me. There are plenty of more qualified individuals who will give you their own take on finances.  I want to say their point of view may be true. It doesn’t mean it has to be your truth.  My goal is to teach individuals how to build a strong a foundation. If a foundation of a house isn’t strong the house will eventually collapse. You can take the information I am giving you and transform it to fit your needs.  I am not building your financial freedom – you are! At the end of the day your finances are not my finances. When I decided to take control of my finances, I did so much reading and listened to Dave Ramsey’s podcast.  What I discovered it everyone is right in their own way.  I really gravitated towards Dave Ramsey. I believe his baby steps can work. I agree “Cash is King!”.  However, I have a credit card and I rarely use cash for a completely unrelated topic. I did what was best for me and I hope you do the same.