Creating a Budget for the Very First Time!

How to create a budget for the very first time when you have no idea where to even start.  This is almost embarrassing to admit but I truly had no idea on where to start on creating a budget for myself.  Well, let me just tell you it’s something I’ve never done before.  Ok, there was a true confession of Lisa moment.

I felt like creating a budget and sticking to it was the only way I was going to start to dig myself out of the hole that I had dug.

Sometimes an eye-opener experience comes when you put it down in black and white.  That reality sets in and only you can do something about it.  So here I am today taking my first steps in learning how to set up a budget.

Why do you ask?  Was it because you had so much money you didn’t have too?

Are you kidding me?  I’m not one of the lucky ones who is rolling in the dough.

I am just a person who pays their bills first and then I play.  I guess in my mind I kind of did a budget.  I pretty much knew how much money I had to spend or not to spend.

Or at least that’s what I told myself.

Budgeting just wasn’t taught to me growing up.  I watched my Mother barely make it.  I got told “No” a lot but I never questioned why.  I just accepted it.  Besides, if you never had it then you didn’t know what you were missing, right?

I recently asked my Mom about budgeting and she replied with “I guess I knew in my mind how much I had to spend and what I had to pay and usually there wasn’t anything left over.”  Now I know where I got that thought process.  See how we teach our kids without really knowing that we teach them.

Here I go about to tell my age, but I do not remember budgeting ever being taught in school.

Maybe they assumed you would just know that you should budget.  Or maybe it was because in the town I grew up in everybody lived paycheck to paycheck and there was no need to budget.  You just did the best you could do with what you had.

But better yet, maybe math just wasn’t my strong point and my mind drifted while in class.  I might have to give that some deeper thought later.

My late husband was a CFO of a company.  He was so used to working with larger numbers so when our checkbook didn’t balance he would just say “Don’t worry about it, it’s just a few dollars”.  Well a few dollars to me were just as important as millions are to companies.  I used to kid him about our checkbook not having numbers big enough for him to deal with and that’s why he left our bills to me.

So what is budgeting?

“Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do.”

So why not join this journey with me and let’s set up our very own budget.  Grab that pen and paper.

STEP ONE: Learning how to budget and deciding why you want to set up a budget.

Write your goal at the top of the sheet of paper.  Here is mine.

Budgeting Goal:  I want to save for the things I want and to do the things I want to do whether it be a vacation, or fixing things around my house.  But most of all to pay off the debt I’ve accumulated trying to dig myself out of grief.

Don’t ever let anyone tell you that grief is just something you feel when a loved one dies.  Nope, grief also comes when you lose someone you love too (if you missed my life story you can read about that here) and it makes you do things you typically wouldn’t do if you were in your right mind.  That’s another whole post at a later time.

 

Our mission to find out how to budget. 

How do people do it?  Do they stick to it?  How do they stick to it?  What do you do once you have it all written down on paper?  Determination and learning to say “No” is going to be hard, but I have to remember the ultimate goal here is why I am doing this.

It’s going to be a process and we all know when a woman sets her mind to do something she does it.

where there is a Will, there is a Way…

So I’m going to break this down in baby steps so that we won’t get overwhelmed and not follow it through. I don’t know about you but sometimes I am notorious for starting something and not finishing it.  So let’s not pressure ourselves to do this all in a day but to take it slow and give ourselves time to do it by setting a deadline of one week to accomplish.  Surely, we can meet that deadline.

And if need be, then stick post-it notes all around your house to remind you why you are doing this and why you are constantly saying “No” to things that are not necessary”.  I can see the bathroom mirror now…looking like a post-it notes store…lol

Wants vs. Needs is going to be thought about a lot here.  Hear those voices in your head now?

Now is this really a necessity or is it just a want?

Can you live without it?

Let’s “DO THIS!”

STEP TWO:  Start gathering all your information.

Let’s gather all of our information.  This will consist of your monthly bills, medical bills, any debt you owe.

I gathered all my bills which were an easy task since I keep my monthly bills in an Excel spreadsheet plus I write them in my personal planner.  I do this so I can remember if I’ve paid something or not.  My brain is constantly bouncing from one thought to another and I have a tendency of thinking about something and then forgetting, but thinking I did it because I thought of it.  Does anyone else have this problem or is it just me?  Dang ADD…

Once you have all your monthly bills written down then you will need to add them all up and this will give you the total amount of debt you have.  It may or may not be pretty, but it’s not the end of the world.  Just remember we didn’t get into this overnight and we won’t get out overnight.  Baby steps…

STEP THREE:  Next, on a separate sheet list you will need to list all of your assets and their current value.  What is considered an asset?

An Asset is a single item of ownership having cash value.

• House
• Car
• Furnishings
• Retirement accounts
• Savings

You get the picture.

Once you have this all written down, you will need to add it up and then subtract your debt from it and this will give you your “Net Worth”.

Total Assets minus Total Debt = Net Worth
Got it!

 So give yourself a week to get this all together and I will meet you back here next week and we will start the journey of finding out where our money is going.  This may be scary but the sooner we figure it out the sooner we will start taking charge of our money.  Until next week…

Taking Charge and Creating that “Champagne Life“,

Lisa