Whether you are making a budget for the first time or just updating one, the process is quick and easy. I’ll be breaking budgeting into three simple steps, if you’d like to join with us in making a budget this month. Do a few minutes of homework each week, and by the end you’ll have a target budget that will help you save money throughout the year.
Know Your Spending Habits
The first step to creating a budget is to know what your spending habits are like right now. Take a few minutes this week and round up all your bank statements and receipts from the last month. You also need to know exactly how much money you’re making. Gather up recent pay stubs to get a complete view of your income. If you’re having trouble figuring out what you actually spend, try looking at the spending habits of the average American for reference.Second, group each expense into categories such as utilities, donations, savings, transportation, and clothing. Pick the ones that work best for your specific family. I try to keep it to less than 10 categories for simplicity.
Our Spending
Our family will be using No Spend Month as a time to make a household budget. We set a budget after No Spend Month last year, but we have faced many life changes since then, so it’s time for an update. Our expenses are a lot different this year. Transportation expenses are much higher and we have a toddler who makes a surprising impact on the grocery bill. Luckily, we have also added a lot of money saving strategies to our lives in the past year so hopefully that will help. I’ll be sharing some of these with you throughout No Spend Month.
Continue reading Part 2 of the How to Make a Budget series.
Did you find any surprises after taking a closer look at your spending habits?
