So you’ve said it a million times, but it’s intimidating and confusing and boring and just never seems to happen. Budgeting. Womp womp wommmmmp. *Shudders*
Ok, I get it, friend. I was there. I thought budgeting meant you were poor. I thought budgeting meant you didn’t have any fun. I thought budgeting wasn’t for everyone. But I also thought I wanted to go full time in my business. And I also thought I could just spend whatever was in my bank account. And I also wound up with some credit card debt and an awful lot of guilt because I knew I wasn’t #adulting very well. I have big regrets about my money habits back in the day, y’all.
So let’s set the record straight. Imagine me saying this with all the love and grace in the world but with strong sincerity. Budgeting is for everyone and YOU NEED TO BUDGET. I don’t care who you are, what personality type you relate to, what your circumstances are, how many piles of money you have laying around, budgeting is for you and you need to do it like yesterday. Need more convincing? Here’s my breakdown of the 3 main reasons you need a budget!
So now that we’ve got that out of the way, let’s GET TO WORK girl!
Disclosure: Some of the links below are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase
STEP ONE: Set your Mindset Straight
I want you to read these few statements over and over until you could look me in the eye and promise you’re committed to doing the dang thing.
Budgeting is a skill that does not come naturally to most creatives. It will take learning, growth, failing, grace and getting back on the wagon time and time again, but you are 1000% capable!
Budgeting will make the difference in whether or not you actually reach your financial goals, both personally and in business.
You have to start with a crappy first draft and a commitment to do better next time.
STEP TWO: List out all your recurring personal expenses
Make a list of all those expenses you always have to pay and note whether you pay them monthly or annually. Here’s a list to get you started!
Cell phone, internet
STEP THREE: List out general spending categories
Make a list of categories that would include everything else you spend your personal money on. Here’s a list to get you started!
Eating Out/Coffee Shop
Gas, Parking, etc..
STEP FOUR: Estimate your Monthly Spending Category Totals
Look at last month and add up how much you spent in each of those general categories you just listed. REMEMBER: this is your crappy first draft. You will have to estimate sometimes. Think of this as a starting point!
Then, input your income amounts in that part of the template. If you don’t currently pay yourself a consistent amount or at all, you can skip this part until the end.
STEP SIX: Assess your Spending
Assess your spending (with your significant other if you have one). Ask if your spending exceeds your income? Would you like to reduce your spending in order to do more with your money? What goals do you have? Maybe it’s to save for a big all-inclusive vacation or to add a puppy to your family or maybe even as simple as getting your nails done every month!
STEP SEVEN: Set your Budget
In light of your goals and spending, set a budget amount for each category you listed above. Remember, this is your crappy first draft and it is not set in stone. One of the best ways to be successful with budgeting is to tweak it every. single. month. Because life just isn’t static – our spending and our life ebbs and flows and your budget needs to reflect that!
How to budget for annual expenses: When you’re setting your budget, those pesky annual expenses that always happen but never get planned for need to be broken down per month and that amount should be set aside every month so that when the month comes to pay that bill, you already have the money saved! This is often called a “sinking fund.”
Based on what you’ve done to this point, now you can determine how much you need your business to pay yourself in order to cover your budget. This may reveal to you that you need to pay yourself more. Or this may reveal to you that you need to uplevel your biz or overhaul your business finances 😉 😉 Stay tuned, more on business budgeting coming soon, but you can start with this post in the meantime!
PRO TIP: Always, always, always estimate on the high end. If a bill fluctuates, budget for the highest possible amount or tweak your budget for that line item every month.
Now that you’ve done all the hard work of figuring out what your budget needs to look like, you want to use an app that’s going to make it simple and easy for you to keep up with and stick to your budget! I personally recommend upgrading to EveryDollarPlus because it will be easier to keep up with as it will pull in your transactions from your bank account and any credit cards you use! Bonus, if you use my referral link you’ll get 30 days free.
STEP NINE: Set a Budgeting Routine
Now that you’ve gone through so much good, hard work, you’ve just gotta follow through and stick to it every month! Easier said than done, right? This is the part where you will fall off the wagon and HAVE to pick yourself up and get back on!
Decide how often you will categorize transactions and make it a part of your routine. I recommend weekly so that it’s quick and all the transactions are fresh on your mind, making it easy to whip through!
Schedule and have a Monthly Budget Meeting every single month and include your significant other if you have one. In this meeting you need to look at how the previous month went, make any tweaks needed to the budget to make the next month successful and reset any goals as needed! As I said before, there WILL be variables every month and it just takes planning ahead for them.
WHAT DO YOU THINK? COMMENT BELOW!
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