Budgeting for Beginners

I have no idea how we did our finances before starting a budget. We started budgeting our money after taking Dave Ramsey’s Financial Peace class in 2014, and as a result were able to pay off my student loan debt fairly quickly after kind of treading water for a few years. You can read part of our debt free journey here–>How We Became Debt-Free {real numbers + our top 6 tips}

Starting to do a written budget every month is really how we got control over our money, but it’s a difficult process to get started and it takes some trial and error to get it right an feel comfortable, so these are a few things that we learned along the way.

  1. Find a form or template that you like.
    I use Dave Ramsey’s forms that can be found on his website. I also found this and this one from consumercredit.com that look pretty good. This one from pennypinchinmom.com. I prefer forms that have all of the categories listed. You obviously don’t have to have something for every line, but sometimes seeing a category will help you to remember things you might otherwise forget.
  2. Start slow and make adjustments as you go.
    The first few months are tricky since people, many times, don’t actually know how much they spend on things. We knew exactly how much we spent on groceries, but that was about it. Our first real struggle was our personal money. We each get a set amount, and the first month I wanted to go out to eat towards the end of the month, so I was watching my spending really closely so I could take us both out. My husband spent his on things he wanted, and I realized that if I saved my money to take us both out, I wouldn’t be able to buy anything else and got irritated with him that he was spending his money on him. Crazy, I know. We realized that we needed a separate category for things that we do together. It seems like a no-brainer now, but that was something that we had to discuss and figure out for ourselves.We’ve been budgeting every month for four years, and we still run into months where we over budget or under budget on a category and have to adjust mid-month, or grab money from somewhere we know we won’t need it all. Knowing that there needs to be a little bit of flexibility really helps when something unexpected comes up.
  3. Zero based doesn’t mean you spend all of the money.
    I kept hearing that budgets should be zero-based, meaning that at the end of the month all the money was gone. I was confused because I didn’t know how we were supposed to save if every dollar had to be assigned to be spent somewhere. It didn’t seem to make sense. Since it took me awhile to wrap my head around the idea, I figure it might happen to others, so I’ll try and explain it the way it finally made sense to me.Zero-based doesn’t mean you’re spending every dollar, it means you’re assigning every dollar. As long as all of the money coming in is going somewhere-payments, bills, clothes, savings, etc-you’re good. Once all of the money is assigned and there’s zero money left over, you’re done!
  4. Communication is key.
    If I need a little extra money for something one month, I tell my husband and vice versa, and then we work out if we can swing it or not. I usually do the budget based on what I know are monthly expenses and then add in anything that I know is coming up, this month it’s truck tags, and then he looks it over to see if there’s anything I forgot or that he thinks needs to be added. If he has a question, he asks it. If I need to talk through where money needs to go, he listens and offers suggestions. It might take awhile, but learning how to talk about money with your spouse will take you so far in managing your money well.If you’re not married yet, check out Simple Tips for Discussing Finances while Dating and Engaged. If you are married or headed that way check out Combining Finances for some tips on how to join your bank accounts after you get married.

Communication about money and sticking to a budget have been the two biggest factors in taking control of our money. They’re not always easy, but they are super worth it!

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