What do you think of when you hear the word “budget?”

I used to think of how boring my life was going to be once I started budgeting. That the days of fun were officially over because I was living life on a budget.

In actuality, budgeting helped me overcome a lot of the obstacles and complaints I had around money previously. I used to stress about how I was going to cover all my bills. My new budget told me how. I used to not have any idea where all my money went. My new budget told me exactly where it went. I used to struggle with communication with my husband around money. Our new budget put us on the same page.

So actually, budgeting is the opposite of restricting. It’s me deciding what my priorities are, and telling my money where to go accordingly. I have more control now with a budget than I ever did before without a budget.

Have I sold you yet on having a budget?

Yes? Awesome, let’s get it started then! 3 simple steps and you’re there!

1. Know your numbers

Before we can get to where we want to go we have to know where we’re starting.

The first thing you want to do is print out your last 6 months of bank statements and credit card statements. Go through each transaction and categorize it. Is it groceries? Utilities? Clothes? Restaurants? Etc. This process can take some time but you just have to do it once to get your budget set up.

Once you have them all categorized, figure out a monthly average for each category. Now you’ll know how much you spend on average each month in each category.

2. Input your numbers into a budgeting worksheet

I created this FREE printable for you so you can input your own numbers into your budget.

Print yours by downloading the worksheet below

Under income, list all net income you take home in a month. This is after taxes and deductions.

Fixed expenses will be the bills you consistently pay every month that are a consistent amount. This would include rent or mortgage, monthly insurance premiums, automatic monthly payments and any other bills that are consistent every month.

Debts will be any minimum debt payments you make every month. It’s ok if you’re making more than the minimum payments every month but for the purposes of this worksheet for now just write down what the minimums are. This can include credit cards, car payments, student loans, medical debt, personal loans, etc.

Savings and investments can include anything you save for every month or invest in consistently every month. If you fund a Roth IRA, if you are saving for an emergency fund, have a Christmas savings account, a vacation savings account, etc. List those here.

Lastly, variable expenses are things you spend money on that can vary every month. These commonly include groceries, restaurants, entertainment, clothes, beauty, things for your home, etc. This is where having those averages really comes in handy since these can vary each month.

Now that you have everything entered, figure out your total at the end. Your income minus your expenses will let you know if you’ve got a surplus or a deficit. Don’t stress if you’re in the negative. In the next step we’ll figure that out.

3. Balance your Budget

First let’s talk about what to do when you have extra money left over in your budget. First of all, congrats! That’s a great place to be! The best thing you can do is assign that extra money a place otherwise it will disappear if it just sits in your account. You can put it where your current priorities are. Emergency savings, debt payoff, investing, it’s up to you!

Now let’s talk about if you’re in the negative. This is where you can go through your budget line by line and see what you can cut or reduce. If you’ve gone through that process and it’s still not balancing, the next thing we need to do is look at ways to bring your income up. Otherwise if you stay in the negative each month you will be going further and further into debt.

3 steps and now you’re on your way to living that budget life!

Believing you’ll be winning with money in no time!

<3 Krista

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