- It's depressing as hell to have debt collectors call you about outstanding credit card bills.
- Knowing what you spend your money on is an eye-opener. It can show you the kind of person you are.
- Life is easier when you know what you can afford and can afford what you want.
When I got married a few years ago, one of our priorities was to figure out what were doing with our money. It was immediately overwhelming to us to be staring at what seemed like an insurmountable pile of student loans and car payments.
But we've come a long, long way in a short time, and it was so much easier than I thought it would be. We are now debt free.
The first thing you should do, even before setting a budget for food or clothes, is track your spending (aka expenditures). To get you on your way, you can start with this: AOAT's Personal Budget Spreadsheet. The link should pull up a Google document that you will be able to download as an Microsoft Excel file to your computer. It will look like this when you open it:
The file can be used as a free budget template to track your expenses each month. I arbitrarily filled in some numbers to use as an example of what a budget could like each month, and the formulas should work out so that you won't have to do any calculations by hand. Take a look and familiarize yourself with it.
Now that you have the spreadsheet, you gotta put your data in. What I mean is that you'll need to enter in your expenses and incomes. This will help you track every penny that comes in and every one that goes out. I want to stress that I do this every month and it is the single most important thing you can do to stay on top of your financial situation.
If you're just starting out, I recommend tracking your expenses for a month and then setting a budget based off of your current spending habits. It's going to take a few months for you to get an idea of what an accurate budget is, so don't even try for the first month. God forbid your food budget is too little...
Source: mediapickle.me, "Dog Gone Budget".
But we've come a long, long way in a short time, and it was so much easier than I thought it would be. We are now debt free.
The first thing you should do, even before setting a budget for food or clothes, is track your spending (aka expenditures). To get you on your way, you can start with this: AOAT's Personal Budget Spreadsheet. The link should pull up a Google document that you will be able to download as an Microsoft Excel file to your computer. It will look like this when you open it:
The file can be used as a free budget template to track your expenses each month. I arbitrarily filled in some numbers to use as an example of what a budget could like each month, and the formulas should work out so that you won't have to do any calculations by hand. Take a look and familiarize yourself with it.
Now that you have the spreadsheet, you gotta put your data in. What I mean is that you'll need to enter in your expenses and incomes. This will help you track every penny that comes in and every one that goes out. I want to stress that I do this every month and it is the single most important thing you can do to stay on top of your financial situation.
If you're just starting out, I recommend tracking your expenses for a month and then setting a budget based off of your current spending habits. It's going to take a few months for you to get an idea of what an accurate budget is, so don't even try for the first month. God forbid your food budget is too little...
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