I started budgeting as a new year’s resolution. During the Holiday break, my husband and I used the
I finally decided to take control of my finances and pay better attention to my bank statements. This is when I seriously considered starting a budget.
Initially, I was too overwhelmed to give budgeting a try because:
- I get paid every other week (bi-weekly) which means, it doesn’t always land on the same date.
- I had too many bills and I thought it would be too much work to figure it all out.
- I knew it would take diligence in keeping track of every single purchase, which I knew I would not be very good at.
After identifying my problems, I decided to attack them one at a time.
Automating my budget helped me ease into the habit of keeping track of my money. Let me show you to start budgeting in 3 easy steps:
Step 1: Know when you get paid
This is the easiest step. Once you figure out when you get paid, open your digital calendar of choice to add your paydays on the calendar. F
I like using Google’s products because I have a Gmail account which gives me access to Google Drive and Google Calendar anytime, anywhere. I also like how universally accessible it is to any user. Whether you have Android/Apple or Windows/Mac, it doesn’t matter. That being said, I will be using Google calendar as an example below:
Create a new calendar
Once you’re logged in, you will see the “Add calendar” option on the left side. Click the three dots to view more options.
Click on “Create new calendar”
You will be prompted to name your calendar. I named mine “Bills 💵” to separate it from my regular calendar.
After hitting the “Create calendar” button, you will see that your new calendar has been added in your list of calendars on the left below. You can now hit the back arrow next to settings to go back to your calendar view.
TIP: When you return to the calendar view, make sure that you turn off the other calendars by unchecking them so you don’t get distracted. I like keeping the “Holidays in the US” on to remind me of upcoming events I might have to budget for.
Add your payday and automate reccurence
Now add your upcoming payday. Make sure you add it to the correct calendar by using the drop-down menu in that pop-up window. Now we’ll have to click on “More options” so we can set up this event to repeat as often as you get paid.
I will use every 2 weeks every Friday as an example because I get paid bi-weekly.
I like to make my payday a different color so it stands out from the rest of the bills (you’ll see when we add the expenses in).
You’re done! See the magic happens.
Step 2: Map out your monthly expenses
The key to budgeting is to anticipate when your expenses will occur. Now that we know when payday occurs, you can then anticipate which expenses fall within that pay period.
Before continuing on Google Calendar, take a minute to go over your bank statements. Figure out when your expenses happen and how much it will be.
Trust me, this step is way easier than you think. You only have to do this once because we will automate this as well.
Read your bank statements
You’ll need your last month’s statement to figure out the frequency and amount of your recurring expenses, and the last 3 statements to get an average of your non-recurring expenses. It will help give you an idea of how much to budget for them moving forward.
Now that you have your last 3 statements on hand, grab two different-colored highlighters. Start highlighting and use it to color code the data in your statement based on the two categories listed below:
- Recurring expenses – Any expense that can be anticipated in frequency and amount every month.
- Non-recurring variables – Any expense that varies in frequency or amount every month. First, find out the average amount that you can use for your budget. Second, you will set this money aside as soon as payday hits. If you like money envelopes, take this money out of your bank account and sock them in your envelopes. If you use separate debit cards, transfer them right away. This will prevent you from spending this money elsewhere.
Add your expenses on your calendar
When you finish highlighting your bank statements using the two expense categories, you can return to Google Calendar and start populating it with the data that you have collected. See the example below:
TIP: Don’t forget to set the repeat option as you add them in your calendar to automate their frequency. It helps to see the amount when you’re on the calendar view so make sure you add that in the expense name as well.
As an example, I used dark purple to note my recurring expenses and the light purple to note any non-recurring variables. Identifying them as such helps me prioritize my budget. When they are mapped out on the calendar, it’s easier to see which expenses belong to which pay period.
For this example, any expense between the 16th-27th are the only ones I have to worry about for the 3/15 pay period.
Tip: If you use my budgeting tool (download it here), you’ll see my that I have a line for “Pay Period” to help note which
Break down categories further if needed
In order for me to make sense of the non-recurring variables, I made a rule by categorizing them even further:
- Sinking Funds – anything I plan to buy in the future, I set aside money to save for them like when I need new shoes or new glasses.
- Living Expenses – any needs like groceries and gas.
- Other – anything that falls under “wants” are budgeted under a guilt-free spending category called “fun.” Any unforeseen expenses like parking fees or overdraft fees take precedence over “fun” in this category.
Step 3: Keep an eye out
Now that you have your expenses mapped out, you are ready to put together a budget, my friend! You only have to worry about 3 things:
- Total income
- Total expenses
- Subtract your total expenses from your total income and figure out your balance
I started with a spreadsheet that my husband put together for me. It adds up all of my expenses and subtracts it from my take-home income. It’s primitive but it works. I actually created a prettier version of it. You can download it here. It’s a printable that acts like a spreadsheet. You can watch my video of it here.
You can also use YNAB which is a budgeting app that you can sync your bank statements to. I’m trying it out right now and so far I like that it simplifies my morning routine of checking my transactions and comparing it to my budget. It’s not as user-friendly but if you spend time watching tutorials, you’ll get the hang of it.
TIP: Make a habit of checking your bank account and budget sheet daily or at least every 3 days. It will help you catch any “unexpected” expenses sooner and be able to move money around to avoid fees.
Good luck, I hope this inspired you to start a budget and empowered you to handle your finances!