Welcome to my 5 Days to Fix Your Budget series.
Over the next five days I’ll show you how to set up a budget, find your net worth, set financial goals, and track your spending. Plus you’ll get free budgeting downloads and software to make your financial life easier. It’s all free!
Let’s get started
So let’s get started with me dropping the B-word.
BUDGET! There, I said it. It’s funny how this little six letter word has the power to strike fear into the hearts of some and cause serious indigestion for others. If your heart is fluttering and your stomach just lurched, then you’re not alone.
Despite its reputation for being boring, time consuming, and out-right tedious, creating a budget can actually be a liberating experience. Keeping on track with a budget can show you where your money goes and help you plan for life’s expenses — whether you’re saving for a home buying a car, going on vacation, saving for school, getting out of debt, or just finding ways to save money. Whew!
What is a budget, anyways?
A budget is a financial plan for tracking the flow of money into and out of your life. The idea is to find the sneaky money outflows, plug the lucrative leaks, and save more of the in-flowing cash for the stuff that really matters in your life. A budget can also expose the spending habits you’re not aware of and help you to better plan where to spend your money.
Building a better budget and improving your finances is not rocket science — anyone can do it! But to succeed you’ll have to make the commitment to try and work hard.
Action Step: Track Your Spending
The first step in fixing your budget is to track your spending. The idea is to track your cash, credit card, and debit card purchases to uncover the real costs in your life. Seeing where your money is spent can be an eye-opening (and jaw-dropping) experience.
Here’s how to do it:
- Get a notebook: Place a small notebook and pen in your purse. OR carry an iPhone, iPad, or iWhatever with you.
- Write it down: Every time you spend money, write it down. Make a note of each and every purchase (grocery, coffee, shoes) and add the date. Ask for a receipt.
- Add it up: Tally your expenses during the week add them to the Free Budget Spreadsheet under the right category. See where your money is really going. Results may shock you.
Next Steps: Check out Day 2: Start your budget