Here’s my confession: I’m not “good” with money.
I was brought up with the mindset that “money comes and money goes” and to try to do with what I had at the moment. For a 10-year-old getting birthday and Christmas money, this is not a bad mentality. However, as I began to experience how difficult it can be to earn a paycheck and had to start thinking about feeding myself, paying tuition, rent, utilities… I have come to appreciate the art keeping track of where my money comes from and where it goes. And so for the past 2 or 3 years, along with all my other new year’s resolutions, I’ve had some variation on the (rather vague) vow to “learn how to budget”. Like many other resolutions, I try for a few months and then it falls by the wayside as the year gets more stressful. This year, I’m trying something a little different: I’m inviting you on my journey to get better with money. My hope is that this can be a mutually beneficial situation where the publicity of my trials keeps me accountable and you can get an honest review of tips and resources that help with keeping a personal budget.
Tip 1: Establish a spending baseline
If you’re like me and just buy things when you need them, it is likely that you don’t have a clear idea of how much you spend in a month. So my *hot* tip for getting started on a budgeting journey is to spend a month keeping track of all your expenses and income. This way, when you try to create a budget, you have an idea on how much you spend on say, groceries.
How to Get Started
I started January with a plan and a Microsoft Excel spreadsheet. The spreadsheet was empty and my plan was to keep track of my spending through the month of January. One of the problems I have had with budgeting in the past was jumping into a new app or downloading a budget spreadsheet and then immediately getting overwhelmed with all the questions that were asked. On this attempt, I wanted to start out with an idea of how much I was spending in a month before I started trying out any shiny new tools. So for a month, I kept every receipt I received and entered it into my spreadsheet, making sure to put a date and a description. By the time January ended, I had a very messy spreadsheet but I had managed to keep track of every transaction.
Image 1: A mocked-up version of the spreadsheet I created to track spending.
The next step was to organize that spreadsheet. I tried to group expenses into broad categories like housing and food. Afterwards, I singled out the expenses I was likely to repeat in February as shown in the images below. After I was done with the money I had spent (and berated myself for how many times I ordered on DoorDash) I repeated the process for all the money that had come into my account.
Image 2 & 3: Mocked-up versions of the spreadsheet I created to track spending.
