Our Pearls write me about it ALL the time and I know exactly how it feels. The complete hopelessness that comes when trying to figure out the first steps to starting a budget.
There are so many factors that play into the giant web that builds your family finances. The never ending expenses, your family income, emergency costs, and bills to name a few. Just thinking about it all quickly gets your head spinning!
Where in the world do you start? What numbers do you look at first? Right now it might feel overwhelming trying to decipher where to begin, but by the end of this article you will have a clear picture on what needs to happen first when it comes to starting a budget for the LAST TIME!
- Basics of Our Family Budget
- How to Start a Cash Envelope System for Beginners
- How to Meal Plan for Beginners
- Monthly Real Life Family Budget Updates (REAL NUMBERS)
- Save Hundreds This Month With a “No-Spend” Month
Freedom of Creating A Goal Based Budget
First it is important for you to understand that starting a budget isn’t a bad thing. Not at all!
When set up correctly, a budget is a financial action plan to achieving your goals. Never think of it as being restrictive! A budget is where you get to tell your money what to do. Put that cash to work. Make that cash work hard in getting you closer and closer to achieving your goals!
It’s up to you! You are going to learn the way of intentional spending. You’ll learn that when you have to say “no” to something, it is clearing a path to say “Yes please!” to something you actually care about.
FREE PRINTABLE Budgeting For Beginners Starter Kit
Before we get started I want to let you know about by free Budgeting for Beginners Starter Kit. In all of my Monthly Family Budget Updates, I share with you the exact numbers of our family finances Google spreadsheet. This system is what we started using several years ago that helped us get out of $20,000 in debt!
You can get the same budgeting starter kit for FREE! It includes all the tools you need for getting your budget started on the right foot!
It includes not only the Google Sheets template with all the formulas ready for you but there is also a printable version so you can use pen and paper if that is your thing! I’ll leave a link in the description box if you want to grab your free download.
Where to Start When Budgeting Feels Like a Hopeless Cause
Evaluate Your Situation
Let’s get you started! The first thing you need to do when starting your budget is to get a clear picture of where your finances are currently sitting. You do this by taking a look over your income and expenses.
It’s best to do this by converting all the numbers to monthly averages. That way you are comparing apples to apples.
To get your average monthly income add up all family income for the past six months. Then divide that total by six. The number you get is your average monthly income.
In order to figure out your average monthly expenses first start by using a tool like Mint.com to track your spending trends for the past three months. It’s really easy to connect your debit and credit cards and have the program track and categorize all your spending.
Set the time frame to figure out how much you spent over the past three months. Then divide that number by three to get a very basic average monthly expenses.
Now compare your monthly average income to monthly average expenses. Are you spending more than you are making? Maybe cutting it too close?
Is There Room for Movement
With your current spending habits in place, is there any cash leftover to work towards your goals? If your answer is no, well then why in the world not? If it’s not going towards your dreams and your goal, then where is it going?
Chances are you aren’t 100% sure where all that money is going. Those $3 stops at Starbucks and $7 trips through the drive thru add up insanely fast!
Back when it was just hubby and I right before we started demolishing our $20,000 debt, we discovered that we were spending over $1,000 a month on food. Cra-zy! What a waste! I wanted to be a stay at home mom but because we were spending money faster then it was coming in, that life goal was out of reach. But man! What a simple fix!
You worked hard for that money! Stop letting it slip away on insignificant splurges and make room for what really matters in your life!
Take a good look at your spending categories and see where you can trim the spending fat in order to make room for some really amazing goals for your family!
Cutting back on spending is the easiest way to make room in your budget. Much easier then going out to get a second job! It’s such a useful tool that come January 2019 I will be doing an in depth webinar training with family friendly strategies to drastically cut back spending and make room in your budget for what matters most to your family and your future together!
You will not want to miss this! Sign up below for my free email newsletter to be sure and find out right away when enrollment opens.
Getting Started When You Are Behind on Bills
If you are behind on bills, don’t let that stop you! It’s all the more reason to get a budget set in place. Use a budget as a road map to get back on top.
Follow the steps we just talked about in order to compare your income to expenses. Then continue in making as much room as possible in your “extra cash” by cutting back your spending. Go extreme here!
If you need to get rid of cable, cut it! If you need to cut and color your hair at home, look up some good YouTube videos and get to work. You gotta work hard here Pearl and you can do it!
Another way to get cash quick in order to get caught up on those bills is to start selling everything but the kitchen sink! Seriously! If it is not a vital part of your family’s livelihood, sell it!
You might have to cut some sentimental ties. It might be hard. Really hard! But what’s more important? Keeping that couch from when you were first married (and isn’t even that comfortable) or selling it in order to gain your financial self reliance?
Those two skills can help make a lot of room in your budget! With all that room, immediately start putting it towards getting caught up on your bills. No questions asked.
Getting Started When You Are Deep in Debt
This is the exact situation hubby and I found ourselves in back in 2011. We had FINALLY had our first miracle baby after four years of trying! The bad news, was that I had to go back to work all too soon because we hadn’t figured out how to run a basic budget and we were in over $20,000 in debt.
We both wanted so badly for me to be a stay at home mom, but because of our bad habits and our debt it wasn’t an option at the time. Something had to change! That was the fire that got our booties moving!
So if you are trying to figure out how to start a budget and are in debt, know that it is 100% possible! You need a budget to be used as a financial action plan to demolish that debt and move on to more exciting things for your family’s future!
Again, follow the steps in comparing your income to expenses. Also find every possible way to cut back spending and find extra cash to start throwing at your debt. Even if it’s an extra $5, put it in with your extra payment this month!
Just like those $5 Starbucks trips add up quickly, those few extra dollars towards your debt payments are going to move the needle fast and before you know it, you will be living a debt free and fabulous life!
You Need More Cash
Well… what if you made every cut in spending possible and are left sitting on pillows on the floor because you sold everything you could think of including your living room couch and STILL don’t have much wiggle room to put cash towards your goals?
In this case, it’s time to start looking for alternative or additional income opportunities. That might mean finding a temporary side hustle while you work on some goals. It might mean thoughtfully and strategically going to your boss to ask for a well deserved raise. Or it might look like making some major life changes in order to start down a new career path.
Either way, you can make it work! Nope. I didn’t say it was going to be easy. But I am saying that you can do it!
Don’t let the confusion of getting started paralyze your from moving forward! Start with step one and keep the momentum going!
Step By Step Guidance in 30 Day Family Finance Rescue Online Course
I get it! I really really do! I remember wishing so bad when we were trying to get our family finances under control that someone could sit next to me and tell me what to do and what was next. That’s what I want to do so badly for you!
This is exactly why I have been working SO hard at creating my brand new online course 30 Day Family Finance Rescue! Inspiring women to take control of their family finances and make living a life on a budget irresistible!
It’s a step-by-step four week plan to save your family from the bondage of living paycheck to paycheck. Learn the skills necessary to once and for all be the boss of your money, demolish your debt, become a financial goal crusher, and get insanely motivated to stick with it in order to transform your unthinkable goals into your family’s reality!
With this course you are going to learn how to control your spending, break all your bad financial habits and replace them with good ones. Learn how to permanently get out of debt.
Figure out what’s next, and create a custom goal based budget that is going to keep you insanely motivate to keep going. Your goal based budget is going to work as your turn by turn GPS directions on how to work towards where you want your life to go!
Enrollment isn’t currently open BUT if you’re signed up for my free email newsletter you’ll be sure to not miss your chance as rescuing your family finances!
Thank you so much for stopping in! Let me know down in the comments any questions you have about starting a budget when feeling hopeless. I’m here the share any help I can!
Talk to you soon Pearl! Xoxo
The LAST TIME You Will Ever Start a Budget!
Your FREE toolkit for creating a goal based budget to keep you motivated and start achieving a life you never thought possible!