Everyone needs to be on a budget! A personal budget may not be the sexiest topic to discuss, but it’s one of those things that needs to be talked about more. In this episode, Joel and I cover our different approaches to budgeting to make sure that we’re on track with our money every month – especially spending, whether on groceries, electronics, etc. You need to have a plan for your money every month, and at its core, that’s all a budget is. We explain exactly why you need to create a budget. And this episode’s beer is Tweak by Avery which you can find and learn all about on Untappd. If you enjoyed this episode, be sure to subscribe in iTunes, Stitcher, or wherever you get your podcasts.
While we talked a lot about what a budget is, why you need one, and how to make one; it can still be a daunting task to create your very first month’s budget, so let’s do a quick recap and how you can make your own right now:
- Write out your total income for this month and put it at the top of the page.
- Take your previous months expenses and build a budget around that for this month. This approach is way more accurate than trying to think of all your different expenses. (I personally include any amount that I’m going to save as well – for example my monthly amount to set aside for retirement, a monthly amount to go towards a savings goal for something like vacation, as well as setting aside money for an annual expense like car insurance.)
- Then subtract your expenses from your income and this should equal zero. You now have a plan for your money, this is your budget!
- Finally, track it throughout the month and stick to it!!! This is the hardest step. And at the end of the month, you can revise your numbers based on more realistic spending and new goals for the new month.
There are lots of different tools and budgeting apps out there but we’d recommend checking out Mint, YNAB, or good old-fashioned spreadsheet which is what I use. Don’t worry about not getting it perfect on your first attempt. If you’ve never put together a budget, it might take a few months of trial and error. And if you’re a budget veteran, leave a comment below if there is a different app that you use for your personal budget. We’re always in a constant state of self-experimentation so we’d love to hear what is working for you!