A little disclaimer for this blog post, budgeting is going to look different for everybody I am sharing our story in hopes that it can guide you in creating your own budget. Another disclaimer, being strict with your finances is extremely challenging, it requires a lot of discipline and patience. There were two things that my husband asked me when he was trying to help me learn to save money; The first, “do you really need it?” and I don’t mean need like “of course I need that bag it’s in season and it’s super cute”, need as in is it a necessity like shampoo? The second was, “is that purchase worth an hour, or two hours of work?” Once I started to realize that I was buying things I didn’t need it was that much easier to understand why saving was so important! and better why saving was doable. Now I’m going to be completely honest this was not an easy thing to digest, it’s really challenging to look at your spending habits and realize that you are spending money on shit that you absolutely do not need. Another “coming to Jesus” moment that I had during this process was the amount of money that I was making was more than enough even though I wasn’t making that much at the time, it was the amount of money that I was spending that made me feel like I never had enough money. In all reality if I had gotten a raise and made more money, chances are I would have spent more money.
Budgets became a necessary part of our life because we had a couple of very large financial purchases that we’re going to be coming up in the near future. One of them was the purchase of a new car because my car had died, the other was a very large amount of student loan debt that was rapidly accruing interest. So my husband and I went over our finances and set aside a budget for every aspect of our life, this includes groceries, personal spending, bills, date nights etc. By creating a budget we were able to find a way to save the most money possible each month.
The first steps for creating a budget is looking at a couple of things: you want to know how much money is coming in each month, you want to know how much money has to go out each month ( bills and fixed expenses like a gym membership), and based on future financial obligations you need to determine how much money needs to be saved each month. Determining how much money you spend each month can be easily done by looking at bank statements. We printed out a few months worth of bank statements and started writing down how much we spent on groceries, eating out, personal expenses (ex. my nails) and how much money went towards our bills. You’re going to have things that don’t necessarily have a home, put those in their own miscellaneous category so that once you have set budgets you can organize those random things accordingly.
So start with the numbers, how much money is coming in, how much HAS to go out (groceries, bills, etc), and how much can you save without putting yourself into the red every month? Stay tuned for more blog posts in the near future, like I mentioned in my Instagram stories this will be a series of posts. You can anticipate posts about budgeting for a house, budgeting to pay off student loans, and budgeting for retirement!