Are you ready to take a massive step towards creating that lifestyle you keep daydreaming about? Learning to organize your income, track expenses, and save money is essential to make your dream life a reality.
As a financial coach, I love to create and share useful tools, and my Net Worth and Budgeting Journal will empower you to manage your money with confidence.
Maybe you are trying to figure out if you can afford to quit your job, live on one income, and become a stay-at-home mom. Perhaps you daydream about starting your own business. For others, not living paycheck-to-paycheck any more would be a dream come true.
Whatever you are looking for, I will teach you in three simple steps how to take control of your finances. Let’s stop overspending and start saving some money around here!
Now, I have to tell you something very important. Although this 3-step process is quite simple, it is not easy to stick to. Hold on, don’t quit on me yet! It is not easy because it requires work and discipline. And we all know how hard it is to stick to anything for more than ten minutes.
But if you embrace budgeting and are willing to show up for your money, I promise, the results you in your finances will be AMAZING!
Net Worth & Budgeting Journal
Get your own copy and take control of your money!
How To Budget Your Money
I like to track income and organize all household expenses by categories. I use a column for estimated expenses that I fill out before the month begins. Then, I have a parallel column for my actual expenses that I track as the month goes by.
I don’t do paycheck-by-paycheck budgeting because I like to teach people to have a larger picture of their finances. I feel like budgeting your money by paychecks keeps you focused on a two-week window of your financial life.
We are doing this on paper and on purpose because it is truly the most effective way to pay attention to your income and expenses. So, grab a notepad or a copy of my budgeting journal and promise me you will stick to budgeting on paper for at least six months!
Practice makes perfect. By tracking your income and expenses manually, you will really get a grip on where your dollars are going.
Knowing how much money you make and exactly what you are spending it on is critical. This habit will allow you to save, pay off debt, or build retirement and college funds.
Budgeting on paper can also be an eye-opening experience because it is more visceral than doing it on the computer or an app.
Writing down your numbers will make you feel something, and it will show you if you are overspending in certain areas or if you are living beyond your means. This information is critical to get ahead financially!
So having said all that, let’s get into the nitty-gritty of this budgeting process that can change your life!
Budgeting In Three Simple Steps
STEP #1: Prepare ahead of time
The first step is to prepare ahead of time by creating a monthly estimate of your income and your expenses. You want to have a pretty good idea of how much you expect to make and spend.
If we don’t make an estimate in advance, we risk running out of money and getting stressed. So, make sure you have prepared your estimated budget before the next month begins.
Like I said, recommend that you plan expenses on a monthly basis and not weekly or bi-weekly. It is also easier to stay organized and plan.
And although most of your payments will be the same, you need a unique budget for every month. You will have to review the amounts you allocate for every spending category monthly and make changes as necessary.
For instance, there will be some months when we have five weeks instead of for, so you need to pay more on childcare, utilities, tuition, or food. Adjust your budget accordingly.
Estimated Income vs. Expenses
Use the “estimated income and expenses” columns on your budget journal to fill out how much you anticipate bringing in and how much you expect to spend the following month.
Make sure you assign 100% of your income to the appropriate categories, this is called a Zero-Based budget.
If you are a salaried employee, you have a pretty good idea of what your paychecks will look like. If you have a variable income, I recommend that you plan based on the lowest monthly income you have had in the last year. It is better to be safe than sorry!
Preparing ahead of time will allow you to paint the picture of your monthly finances before you even spend any money! After you fill out the “estimated income and expenses” categories, make sure that you are not spending more money than you are making. If that is the case, this is the time to trim expenses.
The beauty of doing an estimated budget is that you will know ahead of time if you will have or not enough money for your expected expenses.
STEP #2: Track your expenses
Now that we have created a plan to spend your money, it is time to put it to work. The second step is to follow the budget and track your income and expenses.
Ideally, you want to write down your expenses daily. But, if you are the kind of person that forgets what day of the week we are on, like me, I get it.
Tracking every day is not going to happen. In that case, I recommend that you make it a habit to track at
It is crucial that you don’t wait until the end of the month to track expenses. That would defeat the purpose of budgeting! Tracking is key to figure out if you are overspending, so don’t slack!
STEP #3: Evaluate your actual income and spending
And finally, the moment of truth! Evaluate if you are sticking to the plan:
- Did you spend more money than you make?
- Is your actual income what you expected for the month?
- Are you blowing the budget on any categories or are you by some stroke of good luck sticking to it?
It is essential to be continually checking estimated spending versus actual spending and make cuts where needed. And know that there will always be unexpected expenses. For instance, a speeding ticket, school pictures, or an emergency trip to the doctor’s office.
You can use a “miscellaneous” category to register those unexpected expenses and you should get into the habit of budgeting some money every month for unexpected expenses.
If they are actually “expected expenses” every month, like an Amazon or magazine subscriptions, then they need to be added to your regular expenses list.
Also, be patient! It takes time to get your budget right. As I said, commit to doing it on paper at least for six months before you consider another budgeting method.
Budgeting should become a lifetime habit if you want to win with money.
Conclusion: Net Worth And Budgeting Journal
A budget is a simple plan to organize your income, track expenses, and save money. I created my Net Worth and Budgeting Journal not only to help you plan but also to start thinking about growing your net worth. Make sure to check it out and get your own copy if you are ready to transform your finances!
I believe that budgeting doesn’t have to be complicated. This 3-step process is actually pretty simple, but as I said earlier, it requires discipline. If you are willing to put the work into planning and controlling your expenses you will gain traction with your finances.
Using a budgeting journal will get you closer to making your dream life reality! It will enable you to save money, pay off debt, and improve your financial wellness.
Questions Or Comments?
As always, let me know if you have any questions or comments at the bottom of this post. I love to hear from my dear readers!
Related Articles To Budgeting
- How To Do A Monthly Expenses Snapshot
- 5 Necessary Steps to Get Control of Your Finances
- How to Keep a Good Credit Score Without Being in Debt
- How to Save Money and Stop Living Paycheck-to-Paycheck
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