Hands on a ledger next to the calculator

Budgeting for Beginners

Creating a budget can be intimidating at first, especially if you feel like math and money are not your strong suits. A lot of us tend to ignore budgeting and go on living our lives without any familiarity with the ins and outs of monthly income. Some have the misconception that budgeting will be restrictive in their life. But when you learn to make a budget and stick to it, you gain freedom and confidence. If you are a newbie to budgeting, then it’s time to buckle down and face your fear head-on.

  1. It all comes down to cash in versus cash out. Know how much you make in a month and how much you spend. This is the nitty-gritty part of the process. Get ready to roll up your sleeves and dig deep into your finances. Figure out how much income you bring home each month. Browse through your spending history. There is nothing like the perspective you get when you realize you’ve been spending an egregious amount of money every month on lattes. It’s helpful to cover a period of at least three months so you can get an average idea of your financial ebbs and flows. Not every month looks the same, even when you budget. Knowledge is power, so be as thorough as possible. Since this stage is about gauging your financial health, it is also very helpful to make a list of all your debts. Write them down in order from those that are most pressing to those that are long term.
  2. Once you wade through your financial history, it’s time to build a budget. After you figure out how much you make in a month, figure out how much of that amount you should save and how much you need to put towards debt. After figuring the amounts for savings and debt reduction (some people also add a giving category), then write down all your expenses. This includes bills and all other expenditures. Put them into categories that make sense for you. Don’t forget to add a miscellaneous category, because there is always an expense that you can’t anticipate. After you have written down all the categories and how much you should allow for each one, add them all up and make sure they are equal to your monthly income. This is the moment you’ve been sweating and probably dreading. If your expenditures are way more than what you make in a month, then this is the hard truth you need to acknowledge. But don’t freak out. There is always spending you can reduce and some you can eliminate all together. It might not be easy, but when you figure out a way to make your income and the amount you spend even, then you’ve given yourself a precious gift of freedom and confidence.
  3. Keeping track of what you’ve spent and if you are on target with your budget is essential. There are many apps to track your spending, or you can simply use a pen and paper. Another tip for keeping track of your money is to use cash. I’ve learned that the months I use cash for the categories in my budget for which it makes sense, I do a lot better. There is more of an attachment to money when you see it being spent, so it makes spontaneous spending easier to avoid. Another tip for budgeting is to find creative ways to save. Collecting your coins or cutting out a coffee run every week can really add up over time. If you are really worried about saving, then you can look for other ways to make money. If you know there will be a particularly difficult month financially, look around your house and find something to sell, or better yet, have a garage sale. Chances are you have items you don’t use that are just taking up space.

Congratulations! You’ve created a budget. Remember, even though it truly is scary to admit you don’t know or understand what is going on with your finances, it is always better to sit down and face the music. Also, don’t forget that knowledge is power, and that budgeting is the first step to gaining confidence and freedom.

photo of Katelyn Nixon
Written By Katelyn Nixon
Army Spouse

Katelyn has been a military spouse for six years and enjoys the adventurous lifestyle. To share her experiences with other spouses, she started a blog in 2018.

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