White Mountain Woman

How to Start Your Budget

June 26, 2017 Comments Off on How to Start Your Budget

We know that living by a budget is the first step to gaining control over our finances. And it’s easy to talk about budgets, but sometimes it’s not so easy to know where to start. I’ll be perfectly honest, you can make a dozen new budgets for yourself, but if you don’t have a good handle on what your real expenses are, no budget will ever work.

It’s a common thing to sit down and put together your ideal budget with what you would like your expenses to be, or what you think they are. But that isn’t going to turn out to be a very useful tool. For a budget to be usable, it needs to represent your true monthly expenses. And surprisingly, there are a lot of little expenses that don’t come to mind when we list our monthly costs.

We’ve all seen the main budget categories: food, housing, electricity, medical, insurance. But what we don’t see are all the little extra costs that go along with real life. Like school supplies, postage, vet bills, school pictures, activity costs (soccer/softball/swim team registration, supplies, travel), new windshield wipers. How about the bottles of water or cup of coffee we buy when we stop to get fuel?

We have cute little kids that sell us cookies outside the grocery store, and neighbor kids that sell raffle tickets. There are so many small incidents in our lives every month that take money out of our budget that it is almost impossible to sit down at the beginning and know what needs to be in our budget.
Therefore, tracking expenses for a full month helps us get a better idea of what it really costs us to live. If we write down every single dime we spend for a full 30 days, we get a better idea of how much money we need to make to afford our lifestyle. Once we have a record of what our last month cost, we can also then think about which expenses are necessary, and which ones we need to get rid of.


It’s only $1, but that’s $30/month and $365/year


Almost everyone has money leaking where they don’t even realize it’s going. Every time I have gone through this exercise with someone, I have heard someone say that they didn’t realize how much they were spending on something, whether it be a morning coffee, soda at the mini mart, movie rentals, eating out, etc. Writing down every expenditure for a full month helps us to see these little purchases that add up to quite a bit of money.
I know it’s tempting to sit down and write up a budget right away, once we decide to make this step we want to hurry and get control of our money right now. But part of gaining financial control is learning how to be patient. So, for the first month of your financial journey, take the time to track each and every dime you spend, and in the meantime, you will get a really good glimpse at where your money has been going.

The result of this exercise will be a budget that will be a tool you can use to get to a point where you can say that you are truly financially independent. If you want to live a debt free life, make sure you take every step one at a time to figure out how to reach your goal. It’s much better to use your first month getting an accurate view of your monthly expenses than to hurry into a budget that sets you up for failure from the very start. Once you have completed this step, you will then be ready to take the next step of putting together your monthly budget. Good luck and happy tracking!




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