5 Steps to Create A Personalized Budget Plan That Works
Are you tired of hearing people tell you that you need to create a personalized budget, but don’t know where to start? If you’re nodding your head “yes”, then this is for you.
When I first began putting together a personalized budget, I was hesitant because I thought a budget would make me feel restricted. But then after a while of watching my money fly out the window and wondering where it went, I realized that not having a budget was actually restricting me from making big financial moves.
You deserve to get your finances under control without feeling like you’re depriving yourself – and it’s possible! So let’s get started.
Determine your income sources and track your spending for one month
Do you ever wonder where your money goes? Well, it’s time to take control and find out. Start by figuring out your sources of income and tracking your spending for a month. Is it your main job, side jobs, money from child support? List everything that brings money into your universe.
Then, start monitoring all of those tiny transactions: Amazon orders, home improvement expenses – even the ice cream cone you indulge in after work – and get real about where you’re putting your hard-earned cash.
You can start by downloading your banking statement or Mint – so you can take an honest look at every single transaction you’ve made over the past month.
Yup, scary – but necessary. The truth is, if you don’t get a good idea of where your money is going – and if there are any bad spending habits – then you’re pretty much leaving yourself open to financial disaster. Do yourself a favor and make this first step!
Find ways to cut back on unnecessary expenses, like eating out or buying coffee every day
Once you know where all your dollars are going, this step is easy. By curbing those unnecessary expenses, like eating out or grabbing an expensive coffee almost every day, you can save yourself loads of money without much effort.
It might sound challenging to cut back right away, but why not start small? Take it one day at a time or consider bringing leftovers for lunch instead of ordering takeout.
Small victories add up and soon you’ll have the added benefit of more money in your pocket and a sense of accomplishment about being smarter with your spending.
For me, I had a bunch of subscription that I just didn’t need. I cancelled my amazon prime, and just become more intentional with getting what I need when I grocery shop. Once I took away my option of next day shipping, my needs stopped being so urgent and I began finding other solutions around that house to meet my needs.
Create a personalized budget that accounts for all of your essential costs
The next step is understanding what’s essential and what’s not. Start your budget by listing out all the necessary costs you have to cover in order to maintain a comfortable lifestyle.
That includes rent or mortgage payments, food, transportation, medical insurance payments…the list goes on.
While there may be demands for “nice-to-haves” versus your must-haves like cable bills or other services you don’t directly need, make sure that the nonessentials are treated as just that — parts of your life you can do without if things get tight.
Make sure to leave some room in your personalized budget for fun activities or unexpected expenses
You want to stay sane while saving your hard earned money, it pays to leave a little wiggle room in your personalized budget. Who wants to go through life feeling deprived?
Get yourself a little something fun here and there, but also think ahead to make sure you’re capable of absorbing any unexpected expenses life may throw at you.
My husband and I agreed on a fun money budget. I like to spend money clothes and he likes to buy Dairy Queen Blizzards. So instead of fighting it, we set a limit for ourselves so that we can enjoy ourselves while still sticking to the budget.
Put room in your budget for a little fun so you can enjoy life’s little luxuries from time to time – just don’t forget to handle your responsibilities first!
Stick to your budget as closely as possible and don’t be afraid to make adjustments along the way
The best way to make a personal budget is to look at your expenses and decide what is best for your situation. I can show you my budget and you could try to stick to it, but the reality is that our lives are much different and I need to put money toward completely different things than you.
Budgeting isn’t something that’s set in stone – if something comes up that wasn’t originally accounted for, make the necessary adjustments.
So don’t be afraid to tweak and adjust where needed! In no time at all, you’ll master the art of budgeting and start feeling like a finance expert. Practice makes perfect. Once you’ve stuck to a personalized budget for three months, you’ll start feeling like you’ve got the hang of it.
Now that you know how to create a personalized budget that works for you, it’s time to put your plan into action. Start by evaluating your income sources and spending habits for one month.
Then, find ways to curb your spending in areas that aren’t essential. Once you’ve done that, you can start creating your personalized budget.
Make sure to account for all of your necessary expenses, as well as some room for fun activities or unexpected costs.
Finally, stick to your personalized budget as closely as possible and don’t be afraid to make adjustments along the way. With these tips in mind, you’ll be on your way to financial success!