When I first started budgeting this was my biggest question. I had no way of categorizing my expenses or tracking them so I knew where my money was going. I would sit down and say where did that money go? or What did we buy for $40.00 at Walmart? I had no idea what I was buying and nothing to show for the money I had put into it.
I was shown something that has changed my life. A good friend of mine told me about Quicken. I had never heard of it but when she told me what it did I knew it was what I needed to get a handle on our finances. It helped you track your expenses, balance your check book, and categorize your spending. It also set up budgets for you and helped you to track other things like investments or credit cards.
This was 4 years ago that I was told about it and I have used it ever since. I am so in love with this software. Totally worth the money we spent to get it. Along with the things I said above it also can be connected to your bank account and you can update it through the Internet so your accounts are always up to date. It also lets you itemize your receipts. so your Walmart transaction can be filed under household expenses, groceries and medicine. you don't have to pick just 1 category for those types of transactions.
I just recently found out that Quicken has come out with a free online version of Quicken. It is totally complete, but has pretty much all the things you need to have when first starting out budgeting and tracking your expenses. The one thing that is a biggies for me is that you can not itemize your transactions online, it is one category per transaction. for some it wouldn't bother, but because of the way I budget, I like to have the different categories there.
Please if you are trying to budget and getting frustrated with it, go get quicken or try the online version. it is worth every penny if you decide to buy and the online version is wonderful as well.
~Melissa~
Showing posts with label Budgeting 101. Show all posts
Showing posts with label Budgeting 101. Show all posts
Tuesday, February 3, 2009
Tuesday, January 27, 2009
Budgeting 101 part 1
As part of becoming a goddess you must be able to manage yourself in many situations. This includes your money. Unfortunately we really can't live without money. Don't we wish we could!!!! There are so many ways to budget your money. I have found some things that work for me so I want to share them with others to help them to manage their money smoothly.
First off you must set up your budget. To do this you have to first sit down and be very honest with yourself. You have to really analyze your needs and your wants. This can be the hardest thing when it comes to setting up a budget. Many times we think that we need something, but it is really a luxury of life. The way we decided to draw the line for needs and wants was that the needs were things we needed to live. for instance, a car. Definitely needed for my husband to get to work as he works nights and we don't have public transportation that runs that late. now 2 cars would be wonderful, but is it REALLY a need. Can we plan our time around 1 car or get rides to go places? Yes, we absolutely can. So a second car is something on our wants list for when we have extra money to save for a few months until we have enough to buy it with cash. Another example is food. Definitely needed to live so that is something we have to honestly look at and see if we are overspending or not.
So once you have gone through all your spending and seen where your money is going you categorize them under needs and wants. Make a list literally if you need to so you can honestly evaluate. This list that you make will be the beginning of your budget. It will be the way you see how much you can spend and how much you need to cut out of your life.
The next step is to actually set up your budget. I was given an excel spreadsheet form a friend of mine that has a top and bottom section to it that are formulated to work with each other. The top portion is for your income and the bottom for the expenses. This way all of your budgeting information is on one page and right there for you to compare. There are also may other pre- made budgets out there for you to use. A couple I found are HERE on the microsoft office website, HERE on the all about website, and HERE on the LDS provident living website. Many of these would also be helpful with another part of budgeting down the line also. So all you need to do is find one that will work for you. Find a budget set up or make your own so that it works in the way you need it to in the terms that you personally understand. If you don't understand your budget or the purpose of having a budget, you will never live it, so it is so important to get the budget in a format that works for you.
Once you have picked one of the budgets, fill in the needs first and see what if left over for the wants. Sometimes if you have extra you can fill in a few of your wants in the order of importance for you. This includes any savings you are trying to have. It should all be written into your budget so you know how much you are spending and how much you have to work with.
Your budget may end up looking like this:
Income:
$2,5000 a month
Expenses:
Rent:$500.00
Gas and Electric:$30.00
Phone:$25.00
Groceries:$300.00
Household Items ( toiletries, soaps, toothpaste, ect.):$100.00
Savings: $25.00
...
Total Expenses: $2,425
Difference:$75.00
It is ok to have a difference with no category. In the future you may want to put the excess towards savings in an investment plan, but for now, just let it be an excess on your budget. This creates a cushion for you financially until you are better at living your budget you a T. I would suggest if you are going to have a cushion, to make it less and less each month until it disappears. this way you don't always think, "it's ok, we have such and such amount that I can go over." This will not change your way of thinking and pay off any debt you have or help you to live within your means.
So now you know how to make your budget so figure out where your money is going and get to it! You have nothing to loose!
~Melissa~
First off you must set up your budget. To do this you have to first sit down and be very honest with yourself. You have to really analyze your needs and your wants. This can be the hardest thing when it comes to setting up a budget. Many times we think that we need something, but it is really a luxury of life. The way we decided to draw the line for needs and wants was that the needs were things we needed to live. for instance, a car. Definitely needed for my husband to get to work as he works nights and we don't have public transportation that runs that late. now 2 cars would be wonderful, but is it REALLY a need. Can we plan our time around 1 car or get rides to go places? Yes, we absolutely can. So a second car is something on our wants list for when we have extra money to save for a few months until we have enough to buy it with cash. Another example is food. Definitely needed to live so that is something we have to honestly look at and see if we are overspending or not.
So once you have gone through all your spending and seen where your money is going you categorize them under needs and wants. Make a list literally if you need to so you can honestly evaluate. This list that you make will be the beginning of your budget. It will be the way you see how much you can spend and how much you need to cut out of your life.
The next step is to actually set up your budget. I was given an excel spreadsheet form a friend of mine that has a top and bottom section to it that are formulated to work with each other. The top portion is for your income and the bottom for the expenses. This way all of your budgeting information is on one page and right there for you to compare. There are also may other pre- made budgets out there for you to use. A couple I found are HERE on the microsoft office website, HERE on the all about website, and HERE on the LDS provident living website. Many of these would also be helpful with another part of budgeting down the line also. So all you need to do is find one that will work for you. Find a budget set up or make your own so that it works in the way you need it to in the terms that you personally understand. If you don't understand your budget or the purpose of having a budget, you will never live it, so it is so important to get the budget in a format that works for you.
Once you have picked one of the budgets, fill in the needs first and see what if left over for the wants. Sometimes if you have extra you can fill in a few of your wants in the order of importance for you. This includes any savings you are trying to have. It should all be written into your budget so you know how much you are spending and how much you have to work with.
Your budget may end up looking like this:
Income:
$2,5000 a month
Expenses:
Rent:$500.00
Gas and Electric:$30.00
Phone:$25.00
Groceries:$300.00
Household Items ( toiletries, soaps, toothpaste, ect.):$100.00
Savings: $25.00
...
Total Expenses: $2,425
Difference:$75.00
It is ok to have a difference with no category. In the future you may want to put the excess towards savings in an investment plan, but for now, just let it be an excess on your budget. This creates a cushion for you financially until you are better at living your budget you a T. I would suggest if you are going to have a cushion, to make it less and less each month until it disappears. this way you don't always think, "it's ok, we have such and such amount that I can go over." This will not change your way of thinking and pay off any debt you have or help you to live within your means.
So now you know how to make your budget so figure out where your money is going and get to it! You have nothing to loose!
~Melissa~
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