Learning to Budget: Step 1 - Get a Plan

As our renovation is slowly coming to completion, the money is starting to run low. I finally decided to sit down and start budgeting - something I should have done YEARS ago. But it's better late than never. So I thought I would share my "learning to budget" journey through a blog series!

Step 1: Get a Plan

When I start something new, I usually plan it all about before I start. When I decided we needed to start budgeting I knew the first step was to get a plan.

I purchased "The Total Money Makeover" by Dave Ramsey and began reading it. 

What I especially appreciated about this book is that Dave gives you real life examples, and simple steps to help create your budget, get your finances on track and get rid of your debt. It takes some time and hard work, but anyone can get their finances in order. I would suggest this book no matter what financial situation you are in.

To get your plan you need to consider what you are trying to accomplish.

Do you feel like you are constantly living paycheque to paycheque and want to know where the money is going?

Do you need a full budget marking your fixed and variable expenses?

Do you need a simple budget to keep track of your variable expenses?

Do you want to start building your savings account - have some extra money for emergencies?

Do you want to get a handle on your debt and get rid of your debt once and for all?

Do you want to save up for a vacation or some other large purchase?

Do you want to start tithing?

Why do you want to budget?

I think it's important to know why you want to budget to make sure that you actually follow your plan and your budget.

We needed a budget for a number of different reasons:
1. To map out exactly what our monthly fixed expenses were.
2. To find our where all the money was going.
3. To determine how much debt we had and how much extra money we had to continue our renovation.
4. To determine exactly when the money was coming in (our paycheques are sporadic) and exactly when the money was going out and how much we needed to have in the bank each week to pay that week's bills.

My Plan

The first step of my plan was reading "The Total Money Makeover" and learning some tips and tricks, and now I had some budget forms to use.

The second step was to compile all my fixed expenses (utility bills, phone bills, mortgage, etc.) so that when I was ready to start my budget I had the paperwork on hand.

The third step was determining what I wanted to get out of budgeting and what I wanted to accomplish.

Next Step ....

Now I'm ready for the next step - making a budget! Stay tuned for the next post detailing Step 2.

No comments:

Post a Comment