Budget, for many it’s a forbidden word. You mention a budget and the mental images of beans and rice and pain start. Budgets don’t mean sacrifice. When you start a budget, it is the opposite. Budgets bring clarity and security to your life.

Budgeting doesn’t have to be scary or forbidden. I’ve compiled a few tips to help you start a budget.

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How to Start a Budget, When You Don't Know Where to Start. It doesn't have to be painful. www.tweetys.life #budget #budgeting #savingmoney

Start a budget by writing down your necessary expenses

Starbucks and Netflix aren’t included in your necessary expenses. Necessary expenses consist of rent/mortgage, transportation costs, food costs, costs related to maintaining your income.

Necessary expenses are the things you need to keep food, shelter, and safety.

My current necessary expenses follow:

This is my current active budget so I’ve clipped off the dollar amounts. I use YNAB for budgeting (in case you were wondering).

Currently, I split my budget out in with mandatory expenses separated from flexible expenses. This lets me know what to do if money is tight for a month.

Next, add your flexible expenses

For me, this includes items such as lunch at work, gym memberships, hair appointments, etc. These are the items that I can cut easily and I’ll only miss them slightly (especially the hair appointments).

These dollar amounts also aren’t consistent each month so these are flexible. This is where I include Starbucks, Hulu, Dining out and anything else I can easily go without.

These categories can be easily cut from the budget.

Add in your annual and semi-annual expenses

Think of things like your car’s registration, annual fees for credit cards (try to minimize theses), your YNAB subscription, and your annual doctor appointment or medical fees. These are items that happen year but can surprise you when you don’t have them in your budget.

Add up the items in your budget so far

Add up the necessary, flexible and annual expenses to get your total expenses. For the annual or semi-annual expenses, divide these by 12 to determine the amount you should save each month to cover these. If you’re already living within your means, the monthly calculation should be less than your income. If not…

A person counting money. A key step to start a budget.
Add up every expense, yes that secret stop to 7/11 on the way home counts

Revise your budget to cut unnecessary expenses

This one is pretty self-explanatory. If the budget is in the red each month, cut the gym, the subscriptions, the mani-pedis. Cut whatever you need to cut to get back into the black. If you seriously cannot cut anything, work on trying to begin a side hustle. Once you’re in the black, everything gets a little easier and you can breathe again.

Track your spending and adjust in 3 months if necessary

Once you’ve been following the budget for a few months, you can decide to add money to categories (if you’re in the black) or remove money from categories.

If these tips below helped you to get started or helped you think of new items to track, leave a comment below!