
7 Easy steps to start your first budget
I have been working for more than 15 years without ever budgeting my income, and then, our family income. Just paying the bills every month. Spending some money on things and stuff, without worrying about being in debt or not. I must say today, that was a mistake. A huge mistake!
It’s only since I’m a stay-at-home mom that our situation is stable. It took a while, but we are debt free and all our bills are and will be paid. Our budget is set for the year to come.
Would you like to be on track of your earnings and know exactly what money you have every month?
The secret: have a Budget!
Everybody needs a budget.
You may be a student, a worker, an entrepreneur or even a big company, you need a budget. You need to know where you will stand after paying all of your bills. This is also needed to set your life goals. Your goals may be small or big, it doesn’t matter, all you need is a simple budget.
It’s not only important to start a budget, but it’s also important to know your financial situation. To know how much you have, to know when money is coming in and where and when it is going out. If you skip this step, then you run the risk of living over your means.
Holding a simple budget solves all of those problems.
You need an easy step by step instructions on how to start a budget that will actually work for you.
After that, you will experience the exciting step of setting goals and also achieving them!
But that’s after ! It may take time but let’s start step by step!
There are many ways to track your budget, but the first and most effective way is to write it down on paper. Write it down for 2 or 3 months, then you can use any app or tool if you want. Trust me, this is important and it’s the best way to get into it, start on paper.
Grab your favorite drink! Grab a sheet of paper and a pen! We have work to do!
HOW TO START A BUDGET – STEP BY STEP
Before starting this huge work, label the top of the sheet of paper with the month and year.
Don’t worry when I say “huge work”, the first time always takes a bit longer than when it’s in your routine.

STEP 1 – BILLS BILLS BILLS
I know this step hurts. No one likes to pay bills.
I always start with this step as it is important to be consistent in paying the bills and not ending up with extra fees because of not paying them on time.
Here we go :
Start to list every bill you have, no matter how small.
Separate them by when they are due.
This layout list depends also on how often you get your paychecks during the month.
You are paid monthly.
No need to separate, you will only have one list. Write down the name and amount to pay at the end of the month or at the beginning of the next month.
You have two paychecks per month.
List the name and amount due under the 1st or the 15th of the month.
You are paid weekly.
List the bills due for every paycheck day, that should be an average of 4 columns per month.
Add up all the bills per column.
There you are, first step done!
Here, we mostly get paid monthly, near the end of the month, and most of the time the bills are due at the end of the month. So normally, I only worry about doing this budgeting a few days before receiving the salary.
But I know it’s different in every country of our beautiful planet, so I try to make it obvious and easy for all of you.
STEP 2 – GROCERIES AND HOUSEHOLD ITEMS
You will want to have one budget for the groceries and household items.
It is so quickly done to overdo it while in the grocery store. Buy too much or buy some stuff you don’t necessarily need.
Do you ever think of the cost of all the little things needed to run your home?
I can tell you it’s a huge amount for a family of four.
Determine your costs for weekly or monthly food and products to run your household.
For now, decide on a reasonable amount to set aside for groceries and household items. If you’re not sure, check your grocery purchases in your online bank account for the last 30 days.
This will help you determine an amount for each month. It’s better you aim high for now and reduce it later. The worst thing you can do is budget one hundred a week and spend three hundred a week.
If you never tried to limit your groceries spending and if you need more help for this step, those are my best tips to hold and limit your grocery budget every month.
For my family and I, bills and grocery are fixed costs because we know the costs of all our monthly bills and because we have decided a limit for our groceries. This has totally changed our lives, we are no longer overwhelmed because all our needs fit in our budget.
STEP 3 : NECESSITIES
Are there any other things you need to spend money every month?
If you drive a car, you’ll need to buy fuel at least monthly.
How much do you need to pay for fuel? If you have no idea, do the same as for groceries: check your bank account for the last 30 days.
Do you have a lovely haircut and have your nails done every month?
A music, sports or fitness subscription to pay every month?
Buy clothes, beauty accessories, and make-up every month?
Do you regularly have a doctor or dentist appointments?
What are your eating out habits?
All of these are necessities (for the moment). The list can be long. It can also be narrowed down to the minimum when you are ready to live differently.
That may help you too, those are my tips on how to save money on necessities.
STEP 4 – INCOME
Write down your monthly income.
This one is easy when your paychecks are consistent. The same amount of money comes in every month.
If you are paid weekly or every two weeks, you have two possibilities depending on when your bills are due.
1. If your bills are due monthly, you add up all the paychecks to have one amount of income.
2. If your bills are due when you get your weekly or every two-week paycheck, then keep them separate just like all the bills columns you wrote down before.
Another thing to consider is if you have irregular income. Write down your minimum amount of income. This is the amount that you are very sure you will be making this month.
We will deal with your extra income in a further step.
STEP 5 – HOLD YOUR BREATH AND CALCULATE
Now reality hits you right in the face!
Are you living within or over your means?
You add up your total bills, then you add up your total groceries and your necessities.
These totals are subtracted from your total income and Voilà! You’ve made your first budget !!!
This last step seals everything. You know where you are financially. It is important to know that, trust me!
What if I don’t have anything left after bills and necessities?
If you don’t have anything left, take a look at your lists of bills and necessities. Figure out what has to stay this way and what you can reduce for a while.
My biggest change was shopping. Now, before buying anything that is out of our budget list, I think “do I really need or want this” and I take my time to think about it. Most of the time I don’t buy it and sometimes I do. It’s a mindset. When it’s set in your mind, you live better and never feel overwhelmed by stuff you own.
I’m sure you can find a way to reduce your monthly fixed costs.
Just scroll down your list and circle what is possible to do differently and thus save money.
Small ideas: change or cut cable subscriptions, do your own nails, only buy clothes or home decorations when needed, ride your bicycle for short distances, etc.
If you need more ideas, take a look at my list of small life changes to save money.
STEP 6 – EXTRA INCOME
When extra income comes in and upgrades your budget, is it an upgrade or is it a life savior?
With your irregular salary, you have listed your minimum income. But this time you have more than budgeted. It’s a really good thing when you can report extra income.
Or, you have your regular income and managed to find a way to have extras. I can only congratulate you because this is also hard work.
Well, in any case, you’ve earned more money this month because you have worked harder. It’s all benefit for you and your budget.
But… Can you save that extra money for later? Or is that extra money a need for paying bills and necessities?

STEP 7 – SET GOALS AND OPTIMIZE
After achieving this first budget (whether the result is satisfying or not) you can be proud.
I am proud of you!
Now you have a better view of your financial situation and now you can set goals.
I would even say you have achieved your first goal: Set your personal budget!
You can now check this one from your goals list √
This is the fun and satisfying part of having a budget: you can plan your life.
You can plan anything by having your budget set. Whether it’s buying a house, going on holiday, saving money for your retirement, or changing your computer, buying this awesome pair of shoes that goes with that beautiful dress or simply optimize your budget… You can plan anything from now on as you have a budget.
I love having a budget, it’s life changing !
This is the first step to live a better and happier life, to organize your today life, to allow you to fix goals and help you achieve them.
Because of that I know where I am, where we are as a family and everything is possible with a budget when you stay realistic.
And as you already know, I have one million life plans.
After all that said, How do you handle your budget?
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