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This post on budgeting for beginners is THE first post we added to this blog. We conducted a survey before commencement that found 80% of people would’ve liked to know more about budgeting or managing their money when leaving home. Basic budgeting is the first of many posts we have planned on the subject. It’s not sexy or exciting, but it’ll make your life easier.
And everyone likes easier.
When it comes to budgeting, especially budgeting for beginners, there are only three things to measure or list. You can keep them in order however it works for you. I’ve used everything from a reminder list in my phone to a whiteboard and back to a plain old notepad. Whatever works, just get a handle on these three things, and you’re on your way.
How much money are you expecting into your pocket this week, fortnight or month. A month is easier than weekly otherwise, and it means you can do this less regularly. Take your fortnightly income and times it by two. If you happen to end up with an extra pay week in a month consider it a bonus. Woo. Party! This amount plus any additional incomes from student payments, money from your parents, second jobs or whatever is your money in.
But before you start doing laps of the block declaring yourself rich let’s move on to number two. Number two is where your world comes crashing down around you…
Where does your money go in a month? If you have no idea, you should spend a month tracking that before you give budgeting a go. For most of us, the majority of our spend go through our bank accounts so alternatively you could use your bank statements to add up your expenses in the different categories.
Start by working out how much you spend on EVERY month (or a portion of your annual expenses) and listing them down. I’ve written out some categories to get you started.
Now over a month what does that look like? It’s bad right. I thought so. For almost everyone that does this for the first time it’s bad. For some, you might find that this figure outweighs the ‘Money In’ figure. Oh crap. That’s where budgeting comes into it. You need to adjust those figures reducing your expenditure in some areas, increasing it in others until you are spending less than you earn. Then you win the game of life, my friends.
The last thing to consider when budgeting is what do you have coming up? Do you have a friend’s wedding to attend? Those things are pricey! Or maybe your partner’s birthday is around the corner? You need to work out now how much you’ll need for these occasions or events and put that money aside. It should be separate to your savings (hello rainy day) but if that’s not possible make sure your savings will cover you.
I know, I know, being a grown up is hard. Preparing for occasions or big spend items like car registration months in advance will mean you’re not left short with a $10 food budget on the month they actually occur. That makes sense, right? Easier said than done, trust me, but an excellent habit to get into.
There you go folks, budgeting for beginners. The three steps that will get you started budgeting your funds. Take this information and get yours written down. I’ve linked to a few great budget trackers and planners, and there’s something for everyone, especially you spreadsheet nerds. You’re welcome.
Get a basic budget planner from these great sites.
Tidy Form – Possibly the best collection of budget forms on the net!
Freebie Finding Mom – A great started kit
Women and Money – Budget Workshop AND Debt Tracker (bonus)
Melissa is the Leave Home Blog Boss. She is living the high life in her hometown, didn’t finish her marketing degree & drinks too much on a Thursday night. Blogging since 2009, Melissa decided to put everything she knows into making The Leave Home Blog a light & easy how-to guide for being a grown up.