Budgeting 101

The best time to start budgeting is now. It will take a few months to get the hang of it, but eventually it will be part of your daily or weekly routine and you will wonder how you lived without it.

EveryDollar.com is an app for your phone or computer that offers comprehensive budgeting. It's the budgeting tool that I've been using for over a year, it's simple and easy to get set up. You can even connect your bank account to get transactions automatically added.

Maybe a spreadsheet is more your speed and comfort. It requires more set up, but once you have it set up, I like that you can easily compare month over month, or year over year.

The third way that you might set up your budget is with old fashioned pen and paper. While I don't recommend this method for the long term, it can be a great way to get yourself organized.

Taking your last 1-2 bank statements and picking them apart is the best way to get a handle on what you have to work with. The ultimate goal is to give every dollar a name, whether it's going towards savings goals or expenses.

Figure out your categories. Paycheck, mortgage, utilities, food, transportation, shopping, subscriptions, entertainment, health, insurance and travel are some examples of categories that you can use. It's your personal budget, you can categorize it however best suits your needs.

Figuring out where your money is going is an important step in getting to the point where you are telling your money where to go. If you don't tell it where to go, you will wonder where it went. Many people are shocked, embarrassed or ashamed of money decisions made while lacking intentionality. These feelings are normal but unproductive, cut yourself some slack and give yourself lots of grace while you adapt to this new lifestyle. You will make mistakes, you will over spend certain categories, you will make adjustments and you will keep going because you will also make progress, you will have permission to spend, and you know that next month you get to start fresh and try again.

If all of this still seems very overwhelming, I offer a weekly Budgeting Workshop on Wednesday evenings. Sign up for the one hour session and we will go through the entire progress and answer any questions that you have along the way. For a more personalized approach, I offer Financial Coaching, book your complementary consultation to learn more at www.smithfinancialcoaching.com