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Are you thinking of starting a budget? Or have you already thought about it, looked into it, but feel overwhelmed? What are some things to know before starting a budget?
There are so many others who are right alongside you. Starting a budget is a lot to take on at first.
Especially if you’re also looking to tackle a mound of debt.
Budgeting, once you get the hang of things and settle into your routine, can really save your finances. Below are some personal budgeting basics you really need to know before you get started.
1. It can be overwhelming at first
Just like so many other things out there, there are tons of resources online to show you a method to do a task. It can certainly feel overwhelming! How do you know which is the right way, the first time around?
The truth is, you won’t. But here’s the great thing about budgeting resources online: most have an end goal of very similar things!
That end goal is taking control of your finances.
The important thing is to figure out what is easiest for you to use, at the beginning of your budgeting journey.
You could find a really promising app that says it will get your finances on track in two weeks. But when you start using it, you realize that you quickly forget about it on your phone.
Before you know it, you’re not using it for budgeting anymore. And budgeting falls by the wayside.
In that case, it looks like apps won’t work for you. You need something right in front of you, reminding you to budget. Maybe you need to use paper and pencil? Have your notebook sitting on your bedside table, so you finish every day tracking your budget?
For us, a budgeting spreadsheet on the computer worked the best. We had a recurring weekly calendar notice to have a “financial planning date”.
And it worked!
2. There are tons of tools and resources available to you
That part is definitely overwhelming. But let’s talk through it together.
Like I mentioned, spreadsheets worked best for us. It’s like using paper and pencil, but the spreadsheet does all of the math for you. That worked for us.
Knowing that, I went online to find budgeting spreadsheet templates. I looked for what made the most sense to me, downloaded it, and plugged in our numbers.
Figure out what you will stick with to keep your budget alive and well, and then find something that will work for you in that category. That alone removes a lot of the clutter of resources available to you for budgeting.
3. Your “why”
This is a big one. Never underestimate the power of your why, especially when it comes to finances.
Sit down one day and really think about your future. What will your retirement look like? What do you want to do? What sort of nest egg do you want to leave for your children? Do you want to see the world (and actually afford it)?
Create your “why” from what you want your future to look like.
Maybe you want to be able to live on the beach, retired at the age of 50. That is your “why”; the reason you are getting on a budget and paying off your debt.
Or maybe you want to make sure your kids can go to college, debt-free, and already have a retirement fund started in their name by the time they’re 18.
Whatever your “why”, it needs to be at the forefront. It needs to be something you think about all the time because your “why” is driving you to continue budgeting.
Something important to note is that it is a big “why”. It can’t be something small, like that you want to be able to pay cash for a car in a year. In that case, what’s to keep you going when you buy that car?
4. That you and your spouse are on the same page
Budgeting will never work if you and your spouse aren’t on the same page about it. You are both equals in this partnership and need to be in agreement on something as big as your family’s finances.
It also won’t work if you both have different ideas about how you should spend your money. That will only cause huge fights about your finances, and they could end very poorly.
You and your spouse need to both agree on how budgeting should look, your family’s “why”, and what spending should look like.
Once you’re both on board, your family’s budget will feel so much easier.
If you need some help navigating that conversation, check this post out for some secret tips.
5. It will be hard, but incredibly rewarding
There were (and still are!) times when it was challenging to be on a budget.
Namely, when you are saving every penny you have to pay off your huge mound of debt. And you see your old friend from high school on social media is traveling to Greece.
There are times when you are going to want to drop the budget and do whatever you want. In those times, it’s so important to remember what drove you to budget in the first place.
Remember, when you were scared, anxious, and angry, all because of your financial state? Or, remember your “why”, and how it is driving you to be better with your money?
These are things that you will need in your back pocket, especially for those weak moments. They will pop up, I promise you. But you need to be ready for them with some strong opposition.
Your future self will thank you. Mine did, even when I dreamed of going to Greece. But now I can, and won’t accumulate the mound of debt that high school friends did when they took their trip.
6. You can (and should) still have fun
It is such a common misconception that people who budget don’t have any fun! That’s one of the many myths out there that people tell themselves about budgeting.
You absolutely can still have fun, and you should!
It can look different though, depending on where you are in your finances.
If you have debt and are trying hard to get it all paid off, then your fun might be going to an event in the park with some of your friends.
If your debt is paid off and you have minimal bills, you could save up in no time at all to travel the world!
It all depends on your stage in your finances. Saving up for a trip while you’re trying to pay off debt not only extends the time it takes to pay it off, but could also add money to what you have to pay off, thanks to compound interest!
7. It’s possible with your income, no matter the size of it
Budgeting works for anyone, regardless of how much money they’re bringing in.
We all have bills, whether it’s a cell phone bill, car payments, or student loan debt. And those bills have to be paid. Enter, your budget!
Maybe you won’t have a ton of extra money that budgeting cycle to do anything else but pay bills, but it is still possible with your income.
Budgeting, regardless of your income size, puts you in control of your money. That, instead of living paycheck to paycheck and having an overdraft on your bank account.
8. Your friends and family will ask you your secret
Getting your finances in check and paying off debt is something a lot of people have a tough time with. If it’s something that you have not only integrated into your life but become successful with it, people are going to gravitate to you.
They see a real-life success story and want to know how you did it. They want that for themselves. Isn’t it understandable? You were in their shoes when you started!
Just be prepared: they will ask you your secret to success and have questions about your journey. I don’t see that as a hassle though; you were successful in something challenging to most!
Those are the things to know before starting a budget!
Have you looked into things to know before starting a budget, but feel it’s too much? What has been the biggest hurdle for you? Wondering how to make a budget? Check out our complete guide to budgeting to get started!