Welcome to the MrsPLoves budgeting basics series! When your finances are a mess everything can feel overwhelming and even the thought of a budget can send people into a panic. This 5 part series is designed to strip budgeting and saving back to its very bare bones and start with the basics.
Part 1 – My top FIVE tips to kick start your budgeting journey.
1 – Work out exactly what money you have coming in
I believe the first step in gaining control of your finances is knowing exactly what you earn. This may be you on your own or with your partner, just take the time write down on paper or on a spreadsheet the total sum of what you have coming in.
2 – Write down every single out going
Now we have our income, its crucial to know what you are spending, this means taking the time to write down all expenses including bills such as mortgage/rent, adding up your monthly food bill, fuel payments, utilities, TV and internet, car payments, debt re-payments, even that coffee you buy every morning on the way to work. Put simply, everything that you know will be leaving your bank. This may seem the most intimidating part but I can assure you that it is much better written down or on a spread sheet than it is muddled up in your head.
*If number 2 is bigger than number 1 we have some work to do – in this series of post’s we will discuss ways we can reduce our outgoings and get control of our finances.
3 – Create the habit
Be strict with yourself, I absolutely believe that if you really want to make a change in your life you can. In order to truly gain control of your finances it is crucial to put aside time every single month to keep check on exactly what is going in and coming out of your bank account. No excuses. Set the date and stick to it.
4 – Change your mind set
The word ‘budget’ comes loaded with all sorts of baggage, people see it as intimidating, unnecessary and hard work but that perception couldn’t be more wrong. Having a budget is not restrictive its freeing! Not only will you see your true financial picture so you can gain control but it shows you what you can spend guilt free! That’s the kind of spending I like! Change the mind set and soon enough you will view your monthly budget meeting as an opportunity to stop those pounds falling through the cracks and to start seeing them grow.
5 – START!!!!
I know this sounds obvious but make a start! Actually do it! Take that first step, it may seem overwhelming but it isn’t. The sooner you start the sooner you can take control of your finances and get one step closer to financial freedom.