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How to Easily Create a Budget

If you’re like me, budgeting brings up negative emotions and feelings that you shouldn’t spend money on the things you love. This is only one side of the budgeting story. Learning how to create a budget is easier than you think.

What if I told you your budget was the not-so-secret key to achieving your goals? Maintaining and sticking to a budget is the foundation of financial health, and many tools exist to help you become a budgeting rockstar. 

how to create a budget, how to budget

You may have a negative relationship with your budget, but I’ll be the first to tell you that you can change that. It’s possible to figure out how to easily create a budget and do it all within as little as 20 minutes a month.

Why you need a budget

Fact: you need a budget. 

A budget is merely a tool. Think of it as the GPS system for your goals, whether you want to save for the down payment on a home, fund a 529 plan for your kid’s college expenses, kick some debt to the curb, or save for an amazing vacation. 

The good news is you can make your budget your own. You can change the name if the word budget makes you want to curl up in the corner. You can change the names for the categories. For example, change Income to Money In, and Expenses to Have To’s and Want To’s. The beauty of the budgeting process is when you make it your own and have some fun with it.

Without a budget, your money has no direction. You’ve undoubtedly experienced this. At the beginning of the month, you have every reason to believe you’ll be left with a certain amount left at the end of the month. Except then you don’t. And it happens month after month. This cycle can keep you borrowing from your savings or using your credit card to pay expenses. And you have amazing goals you want to achieve. But they stay dormant on your journal from day to day and never seem to go anywhere. 

Time to break up with a lack of direction.

Check out these budget-related podcast episodes to help you ace your budget:

What goes in a budget

Creating your budget is easy and you can maintain it all in as little as 20 minutes a month. I know for a fact because this is the process I use every single month and have taught thousands of people to do the same.

 There are a few key pieces:

  • A list of your income for the month that you know you will get or an idea of how much you will earn on commissions or your side hustle
  • A list of your fixed (have to pay) expenses for the month. Think mortgage, rent, student loan, minimum credit card payments, groceries, car payment, life insurance, and so on.
  • A list of your variable (want to pay ) expenses for the month. Think subscriptions, gym membership, entertainment, shopping, eating out, transportation, travel, extra credit card payments, and expenses that aren’t necessary, but you really want to have them.

How to make your budget work

A budget is only as good as the numbers you put in it, so think about following these steps to make your budget tell the truth each month.

First: Create your budget at the beginning of the month with a column that includes the income and expenses you think you will have for the month. This can be accomplished by copying and pasting from the month prior, and adding in any extra payments you think you might want or need to make.

Then: Create a second column on your budget at the end of the month that includes the income and expenses that you really did have. This is the truth bomb for your budget. There are lots of tools that we’ll discuss below, but one of the easiest ways to do this is by looking at your current bank statement and totaling up how much you spent in each category. If needed, you can add categories that you forgot about. I’ve got a handy free Signature Budget Worksheet that can help you out. 

Budgeting tools and apps

There have never been so many great tools from mobile apps to software to downloadable templates to help you set up and manage your budget. Don’t just limit yourself to apps as well. Think about Post-It notes, journals, notes on your cell phone. Anything will work. Try a couple of different strategies to see what works best for you and will keep you motivated to stay up-to-date with your budget. 

Here are some tools to get your budget up and running:

You Need A Budget

You Need A Budget offers software and a mobile app to help you get your budget and spending in shape. Its focus is on helping you give every dollar a job along with setting and achieving goals. Sign up for a free 34-day trial to see why I love You Need a Budget.

Clarity Money

Clarity Money is a mobile app that packs a lot of punch. Their motto is to help you take control of your finances by giving you a full financial picture, helping you find unwanted subscriptions and delivering other money-saving knowledge in the palm of your hand.

Medean

Medean is a newer budgeting app that is all about helping you save money. Did you know in fact that the average American has less than $400 saved for an emergency? Medean helps you know where you stand financially and shows you ways you can save money each month. I’ve found that Medean makes budgeting each month super fast and really easy.

Budgeting for couples

Mastering the art of budgeting can be tricky as an individual, let alone as a couple. Money issues with couples are one of the top reasons for divorce year after year. As a couple, you bring to the relationship your own values and habits around money. Hence why so many couples fight about money. That’s why you need to cultivate open communication channels so you can talk about your goals, problems, and create a system that works for you both.

Money rules – it’s a great idea to put a few money rules in place. The rules can serve as a foundation for how you make decisions as a couple for example, who is the primary person in charge of money decisions day-to-day, how much can you each spend without talking to each other, what will your bank and savings account structure looks like, how much will you each invest from your paychecks, etc. Setting the foundation will take the mystery out of money decisions as a couple. 

Money dates – I’m a big fan of weekly money dates. They have been a life-saver in our relationship. A money date is just like it sounds, only better. Set aside fifteen to thirty minutes each week (preferably at the same time each week) to talk about what’s going on with your money. Make your money date enjoyable; have a glass of wine, go to your favorite park, make a nice dinner. During your money date, talk about what’s on your mind. What happened last week to your finances and what’s coming up in the next week. This is your time to reset and get focused on what’s happening behind the scenes with your finances. But please, have fun with these. 

Set goals – Setting goals is a crucial piece of success with couples. You can set money goals in your money dates, or set aside a separate time during the month to write these out. Include short term goals like paying off debt or covering financial risks and longer-term goals like saving to buy a house and retirement planning. Goals can and should be flexible, and always incorporated into your budget so you can achieve them. 

You can budget in 20 minutes a month

You can easily create and budget in 20 minutes a month. Whether you use an app, an Excel spreadsheet, my Signature Budget Worksheet, or software, you can become a budgeting champ in no time. 

Here’s how we make it work in my household:

Beginning of the month:

  • Take 5 minutes and complete the “What I think I’m going to spend” section based on last month’s numbers.
  • Set 2-3 goals you want to achieve this month. Write down what the goal is, how much it will cost, when you want to complete it by and any other notes.
  • Use an app to track your spending throughout the month. I also pre-pay my credit card a certain amount each week. That allows me to bank some credit card points, treat it like a debit card and pay it off in full each month, and easily see where I’m spending my money.
  • Make sure you have weekly money dates with your partner or on your own to stay on top of your cash.

End of the month:

  • Fill out the “What I spent category” and list all your expenses and actual income.
  • Compare and contrast the two columns to see where there are any irregularities. For example, did you budget enough for eating out or Uber trips? 
  • Give every left-over cent a job. Sent it to pay off some debt, put it in savings or towards a goal, or put it towards next month’s budget.
  • Rinse and repeat next month.

See how easy it is! If I can do it, you can do it. Let this be the year you create real change with your finances and start hitting all your goals out of the park!

Disclaimer: This post includes affiliate links, and I will earn a commission if you purchase through these links. Please note that I’ve linked to these products purely because I recommend them and they are from companies I trust. There is no additional cost to you.

How to Budget With Inconsistent Income

If you’re an entrepreneur or self-employed, you’re surely on a first name basis with inconsistent income. Let’s be real, learning how to budget is hard enough when your income is consistent. When you throw in the curveball of inconsistent income, your finances can feel downright out of control. 

how to budget

While you might be tempted to throw your budget out the window, I caution you to think twice. I’ve been an entrepreneur since I was 19 years old, and having a budget in place has been one of the smartest money moves I’ve made to manage the ebbs and flows of income and expenses. Always remember, a budget is just a tool that directs your money where to go and an essential part of your financial plan if you have inconsistent income. 

Why you need a budget

It can’t be said enough – if you are working with inconsistent income you need a budget. In fact, everyone needs a budget even though most people hate the idea of a budget. Learning how to budget the right way can be tricky, but is totally doable.

One of the best pieces of advice I’ve given my clients over the past decade is to change the word “budget” to a word that excites you. For instance, I love to travel, so my budget is called my travel itinerary.  It keeps my head focused on the why behind my budget each month. I encourage you to change the word budget into whatever excites you and will keep you motivated to stay on top of your finances.

So, what is a budget? 

A budget is a tool to help you achieve your goals – personal or business-related. Your budget tells your money where it needs to go to fund your expenses and financial goals. Tracking the money that goes out of your bank account (your expenses) is essential if you’re working with inconsistent income. There are some simple steps to mastering this each month.

  • DIY your budget with an Excel spreadsheet, Post-It notes, paper, or whatever works for you. Download my free Signature Budget Worksheet to help you out.
  • Or choose a mobile budgeting app like You Need A Budget or Clarity Money. Start a FREE 34-day trial of You Need a Budget.
  • Find out what your must-have number is – this is the number that includes all of your fixed expenses that you have to pay each month. Your must-have number is your starting point to build your budget on.
  • Categorize every penny that leaves your bank account, so you know what is going on with your variable expenses – those expenses that change every month. (Hint: your variable expenses is the place where most budgets break down so spend some time getting to know these expenses).
  • Set spending goals for any category that you feel is out of control (Hint – for most people that is eating out and uncategorized fees like ATM fees and Uber or Lyft rides).
  • Calendar weekly a weekly money check-in so you can review your expenses for the week, set goals for the week coming up, and direct any excess income towards your goals.

Check out these budget-related podcast episodes to help you ace your budget:

Have an emergency fund

Traditionally, you should look to save between three to six months’ worth of fixed expenses in a savings account, ideally, a high-yield savings account, for your emergency fund. However, if you’re working with inconsistent income, your goal should be to save between six months to a year’s worth of expenses.

That may take you a while to achieve since your income is in flex, but if you’ve ever had a month where you’ve struggled to make ends meet, you understand the importance of having a savings safety net. 

If you aren’t sure where to begin to supercharge your savings, start with the first step of knowing where every cent is going from your bank account. This allows you to track patterns and find savings that are hidden in your bank account. You might notice that you’re indulging in some unnecessary expenses each week that you can cut back on and then route those savings to your emergency fund. 

In the land of inconsistent income, you’ll need to pull out every money trick you have available to you. That begins with thinking about your money differently. 

Opening a high-yield savings account at an online bank such as Marcus by Goldman Sachs or Ally Online Savings is a great place to start. On average, online savings accounts offer higher interest rates for your savings, which means more money in your pocket. Earning more money on your money is a great place to start when you’re ramping up your savings. 

Make a budget plan that works for you

The idea of budgeting might not sit well with you, but the good news is you can make a budgeting plan that works for you. As long as you are actively tracking your expenses, you can create a budget that meets your needs both functionally and aesthetically. 

For instance, meet Amanda. Amanda is 31, a single freelance writer and content strategist, who deliberately plans for July and August to be income-free months. “I love traveling in the summer, and for me, it was a big reason why I decided to jump into the freelance life. Sometimes, I get checks, or a project runs over, but in general, I know that I need to budget to cover those two months whenever I work on projects throughout the year.” Amanda has made her budget work around the lifestyle that is important to her. You can make up rules that work for you.

  • Build a travel savings fund so you can take a month off to travel
  • Build in a reward each month if have excess income and stayed on task with your budget every week
  • Scale back on retirement or college fund savings in months where you’re not as flush 
  • Use a rewards credit card for points or cash-back that you can use for holiday gifts
  • Break big goals like saving for a house or planning a wedding down into small monthly savings goals and incorporate them into your budget. In a month where you have excess savings, you can allocate more money towards those goals and then scale back in months when you need to

Bounce back from a mistake 

Miscalculation and mistakes happen to the best of us. You thought a project was going to come through and it ended up falling away leaving you short on money for that month. It can leave you feeling like you’ve failed and lead to a big confidence crash. I should know, I’ve been there myself many times in my long entrepreneurial career. The good news is you can re-calculate.

Fear breeds confusion and confusion leads to mistakes in your finances. If you find yourself in the position of a miscalculation or mistake the first place you turn to is your must-have number. How much money do you need this month to pay for your must-have expenses? Once you’re armed with that number, you can find out where you’re short and head to your emergency fund for some relief. 

If your emergency fund is need of some help of its own, taking on debt would be the next logical step to bridge the gap. In this situation, you’re looking for debt with the lowest interest rate that is available to you. This might be a credit card you use for business or a personal loan from an online lender such as SoFi or Lending Club.

Remember only to borrow what you need to bridge your financial gap and calculate what your monthly payment would be to pay off the debt ideally within three months. Once you have that number, add it onto your must-have budget list so you can pay off the debt quickly. 

Use mistakes to help you

Don’t beat yourself up. Again, mistakes happen to us, all and it isn’t a sign of weakness. Figure out a plan to cover the financial gap, put that plan into action, and then move on. Do your best in months of excess income to save as much as you can in your emergency fund so when you miscalculate again (and you will, and it will be ok) you’ve already created a financial safety net. 

Sticking with a budget to manage inconsistent income takes time and practice to form a habit. As an entrepreneur, I can identify the months when I stay on track, manage my expenses and use my income as a tool to achieve my goals from the months when I don’t, and my finances suffer. 

There’s no perfect score when it comes to budgeting with inconsistent income – sometimes you’ll have it all together and other times you won’t. There’s no need to stress – while your income may ebb and flow you can create a budget that stays consistent with some practice.

Disclaimer: This post includes affiliate links, and I will earn a commission if you purchase through these links. Please note that I’ve linked to these products purely because I recommend them and they are from companies I trust. There is no additional cost to you.

Real Talk About Investing For Women (with Amanda Holden)

I’m normally not a big fan of separating women from men when it comes to money, however, I am a strong supporter of creating a new language around investing for women. Why, because, as our guest, Amanda Holden, aka the Dumpster Doggy says, “there’s a lot of femme shaming when it comes to money, how we’re spending and investing it and well, we just don’t process information the same way, but that’s a good thing.”

So let’s drop the bs and get some solid investing advice from someone who is committed to changing the way women invest.

Investing for women

What You’ll Learn

  • Why Amanda is passionate about teaching women what they need to know without the bs
  • The story behind Amanda’s successful blog, The Dumpster Dog Blog
  • Money blindspots women have and how to avoid those
  • How to win at investing even if you are a newbie
  • Why learning about investing is critical

Links


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Episode Transcript

 

 

The Power of Your Money Story & How to Create Real Change (with Dr. Daniel Crosby)

We all have a money story. A way in which we grew up thinking about money, either consciously or unconsciously and our money story has power over the choices we make and don’t make with our money.

Our podcast guest, Dr. Daniel Crosby, a psychologist, and a behavioral finance expert says that behavioral changes around money are tough because we all think our money story is normal because that’s all we know. So then the real question is, how do we create real change with our money?

money story

What You’ll Learn

  • How powerful are brains are when it comes to money
  • Why your money story is a critical part of your success
  • How you can balance the fear of investing with the need to invest
  • Why Daniel decided to write his latest book, The Behavioral Investor
  • How you can override your money story and create a new one

Links

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How to Budget (the Right Way)

Six letters – BUDGET – probably one of the most despised combinations of letters in the English language, but that’s because you’re thinking about it all wrong. A budget isn’t a set in stone document that is some formal decree telling what you can and can’t spend your money on. In fact, in this reboot episode, you’ll learn how to budget, and why I’m giving you permission to throw out your budget with a few simple caveats.

how to budget, how to create a budget, budgeting

What You’ll Learn

  • Understand why you despise the process of budgeting first
  • What questions to ask yourself to get in a better money mindset
  • Why setting goals is the key to achieving financial success
  • So many tips on how to win at budgeting and tracking your money each month
  • My easy 1-2-3 system of budgeting
  • Why you need to be in the driver’s seat when it comes to your spending (your future will thank you)
  • Sharing my own story and struggles with budgeting

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If you loved this episode, don’t forget to share it with your friends on your favorite social channel and tag @shannahgame.

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Money Saving Tips for Black Friday and Cyber Monday (with Jay Klauminzer & Julie Ramhold)

It’s that time of year again for Black Friday, Cyber Monday and all the deals. It’s easy to get carried away and spend more money than you want during this time of year. Luckily, I’ve got Julie Ramhold from DealNews and Jay Klauminzer from Raise on this episode to help us sort out the money-saving tips we need for Black Friday and Cyber Monday.

money saving tips for black friday and cyber monday

What You’ll Learn

  • Where the deals are, and where they aren’t
  • How to shop smarter and make your money stretch
  • Mobile apps and websites to help you save money
  • When the best day is to shop
  • How to outsmart the retailers and know what to buy when
  • How to buy gift cards at a discount with Raise

Links

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Ace Your Fall Financial Checkup (with Rod Griffin from Experian)

Spring cleaning is one thing. However, there’s something to be said for cleaning up your finances this fall.  Your wallet is going to get a workout in the next few months (hello holidays), so I turned to Rod Griffin from Experian to share with you 5 tips to help you ace your fall financial checkup.

finances, fall financial checkup, money moves

What You’ll Learn

  • What steps should you be taking to clean up your finances this fall
  • How to give your credit a fall overhaul
  • Tips to revisit your spending and cash flow
  • The best ways to raise your credit score
  • Opportunities to bank additional retirement savings this year

Links

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Insider Secrets to Sell Your Stuff Online (with Brad Williams from Mercari)

Have you ever wondered how you can sell stuff online and actually make money? In this episode, we’re sharing the insider secrets to sell your stuff online.

There are tons of places to sell your stuff, but today we’re talking to Brad Williams head of communications at Mercari, the fast-growing resale marketplace mobile app to help you figure out how to sell your stuff and get paid. And, get this, Brad says the average person has around $723 of stuff in their house just waiting to be sold.

selling online, mercari

What You’ll Learn

  • The evolution of the online resale marketplace
  • How to figure out what stuff will sell and how to sell it
  • How you can earn extra money for the holidays using Mercari
  • How to price things so they sell
  • What to look for as a buyer (how to spot the deals)

Friday Finds

  • Viceroy Hotels & ResortsCode: CYBER2019 (note: deals will be available 11/27-12/6)
  • Gansevoort Meatpacking – Code: CYBERMON (note: deals will be available the week of Cyber Monday, kicking off Dec. 2)
  • Virgin Hotels· Discount: 30% percent off of Best Available Rate Dec 2, 2109 – Jan 2, 2019

Sponsored By

Big thanks to You Need a Budget for sponsoring today’s episode. You Need a Budget or YNAB is award-winning software and a proven budgeting method that actually works. Stop stressing about money and start your FREE 34-Day trial of YNAB today by going to ynab.com/millenial.

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Is Your Bank Helping You Get Out Of Debt (with Andrew Au)

The millennial generation is unlike any before it. There’s good stuff like technology and digital apps and not so good stuff like new money worries and a changing job climate. Today’s guest, Referred to by Forbes magazine as the millennial expert, Andrew Au agrees that the millennial generation isn’t lazy, they’re just different and banks need to start responding to these differences.

The stats don’t like – three out of every four millennials are in debt and the problem isn’t getting better. What responsibility do banks have in this mess? Andrew is offering some good advice in this episode to help you think about where you put your money and how they are helping you meet your money goals.

how to get out of debt

What You’ll Learn

  • What responsibilities bank have with the increasing millennial debt
  • How to know if your bank is helping you or hurting your money goals
  • How to best use all the money apps and tools
  • What the future is of money management tech

Links

Thanks to Our Sponsor

Big thanks to our episode sponsor, Bluehost. You can start a blog, a new business, even a podcast all for as low as $3.95 a month with my special Bluehost introductory offer by going to bit.ly/bluehostmoney.

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Enneagram & Coffee Expert On Your Relationship With Money (with Sarajane Case)

I’m sure you’ve probably had someone tell you about their enneagram number. It seems like the enneagram model is everywhere. There are so many questions: what is all about, does it even matter, and how can you use your enneagram number to help you with your finance?

Our guest, Sarajane Case, is an Enneagram expert and host of the Enneagram & Coffee podcast. Sarajane is sharing so much Enneagram wisdom including why you need to think of your enneagram number as your character structure, not your personality type, and how you can use your number to help you with your finances.

Enneagram expert talks about your relationship to money

What You’ll Learn

  • What the history is of Enneagram
  • Why Enneagram is having its moment right now
  • How can we use our Enneagram number to inform our money choices and behavior around finances
  • A rundown of each of the nine Enneagram numbers and a few traits of each number
  • Sarajane’s money story and how she’s used her Enneagram number to help her decision making

Links

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