Let’s be honest, everyone could use a budget in their life. Budgeting will only bless your life and help secure your future. But sometimes it is hard to get started. Let’s go over some simple tips and tricks that have helped me, and could help you get started creating your own budget.
Budgeting Basics
As always, let’s start with the basic facts. Budgeting is about helping you live within your means. In other words, it’s helping you spend less than you make, or save more than you spend. This is best accomplished by helping you be aware of how much you are spending on a regular basis. This is where a simple budget comes in.
Create Your Budget
1- Choose your Template
A budget can be as simple or complex as you want. My very first successful “budget” was in a small notepad that I kept in the kitchen drawer. Then I realized a digital budget would be so much easier because 1. it can automatically do the calculations for me and 2. I can update it from anywhere.
There are so many budgeting templates to choose from. When I was first trying to find the perfect budget to get started, I was feeling a little overwhelmed. So I decided to create my own simple spreadsheet budget on google sheets. You can create your own, or if you would like to give my free template a try, click here!
In reality, you just need a place to keep track of all your expenditures. If you don’t have a steady income, or have different means of income, you may want to consider creating a section in your budget to help you track not only expenditures, but your income as well. My budget template is super simple and works best for those who know roughly how much they make each month or year, or who have an idea of the amount of money they want or don’t want to spend.
2- Select your Budgeting Amount
A little bit of math is required when trying to build a budget. All you need though is the calculator on your phone–nothing fancy. There are 2 different approaches I would recommend to establish your budget goals.
Method #1: The Total First Method
The total first method invites you to start with the end in mind; in other words, you determine how much money you make a month or want to spend a month, and build your budget from there. For example, if you make $4000 a month, this would be your starting point. Perhaps you want to save $1000 each month, so your spending budget would be $3000. You would then divide this $3000 up into your specific needs (ie. $1200 for rent, $100 for utilities, etc).
When it comes to rounding your numbers while determining how much money you will make in the month, I suggest rounding down– always better to have more money than you think rather than less).
Method #2: The Absolutes
With this second method you begin by looking at what you have to pay no matter what. For example, if you pay rent or have a mortgage, you will have to pay that each month, no matter what; so, you start building your budget from the ground up. You would create a budget surrounding your necessities, which would lead you to determine and compare the difference of your income vs your needs. With the difference, you would then complete the rest of your budget by filling in the more variable prices (ie. groceries-per-week, or dates-per-month).
Live Your Budget
3- Maintain your Budget
Now, as many will attest, creating your budget is actually the easy part. Maintaining it can be a little harder. This requires discipline. You can choose how you update it, but no matter what, you have to be consistent. Personally, I prefer to write everything in as it happens, or as close to it as possible. Meaning, when I go grocery shopping, I come home, put my groceries away, and update my budget. Immediately can be the most effective method of maintaining your budget because it allows you to stay up-to-date and keeps you very aware of your spending habits. Some other options would be daily, weekly or monthly. Just note that the less you update it, the more work it will be in the end, and the less aware you will be of your habits in the moment.
4- Control your Spending
Live now as few are willing, so you can live later as few can.
Everyone’s budget will look a little different because life is a little different for everyone. But, the principles are universally applicable. If you are someone who has a tendency to do a shopping spree like a “target run,” you better add that to your budget. If you don’t have the income to do a “target run,” then don’t do it. Two wise pieces of advice I’ve heard:
1. Live now as few are willing, so you can live later as few can. By living within our means, and saving for the future, we will find more joy and a more fulfilling future down the road.
2. “Never take one step in a direction you do not want to go.” (Russell M Nelson). That means, if you want to stay financially secure, stay out of debt. Don’t buy those unnecessary things. Live within your means.
5- Understand Necessities vs Wants
This goes right along with controlling your spending. When budgeting, especially out of necessity, it is so important to distinguish between the needs and wants in your life. Do you really need a daily coffee run? No. Do you really need fresh fruits and vegetables? Yes, but be wise in how you plan and purchase them. Do you really need a sugary treat? Debatable. Going out for a treat or eating out adds up extremely fast. Unless you have gift cards, eating out in any form is merely a want. Avoid it when possible.
Now, if you have young kids, you will find that it is strongly recommended that they have snacks throughout the day. Consider off brands. Brand-name items are almost always more expensive. If you are living on a budget because you really need to, avoid name-brand items and unnecessary treats/snacks. If you are living on a budget because you want to, avoid name-brand items and unnecessary purchases simply because you “want” them. It will save you a surprising amount of money.
Love your Life on a Budget
Many individuals have said it, and I believe it’s true: money doesn’t buy happiness. Whether your budget is loose or tight, love your life. Recognize what is eternal and what is fleeting. You may have wanted that nicer, newer tv, but would it really bring deeper joy and meaning into your life? Probably not. Good relationships will though, and those are priceless. Children don’t need the nicest, newest toys or gadgets, but they do need your time and love. As we deepen our connections with others rather than material things, we will find we need very little money to find and feel true joy and happiness. So budget your money so you have control of your life, but focus on what’s eternal.
Summary
In short, a budget is very easy to start, and very possible to maintain. All you need is to choose your template, define your total amount, maintain your budget, control your spendings, and understand your needs vs your wants. As you become aware of your spending habits and patterns, it will be easier for you to make changes in your life to help you feel and be more secure and financially stable. In the end, you and those around you are what matter most, not what you’re buying.
Additional Insights
As I was writing this, I couldn’t help but think of scripture verses I’ve come to love from The Book of Mormon and the New Testament. They’re both a powerful reminder and promise. These may help guide your thoughts as well as you are creating or thinking about your budget:
18 But before ye seek for riches, seek ye for the kingdom of God.
19 And after ye have obtained a hope in Christ ye shall obtain riches, if ye seek them; and ye will seek them for the intent to do good—to clothe the naked, and to feed the hungry, and to liberate the captive, and administer relief to the sick and the afflicted.
31 ¶ But rather seek ye the kingdom of God; and all these things shall be added unto you.
Happy Budgeting!