When I was 16, my dad sat me down at the kitchen table and taught me how to create a budget, how to pay bills, and how to write checks.
The way he taught me how to budget as a teenager is the same way I continue to work my budget today.
After all these years, it has been simple enough to stick to. With that being said, I want to share my best advice for creating an effective budget and sticking to it.
Get a Simple Notebook
When you are creating a budget, especially for the first time, simply start with a notebook. I’ve been using the same pink notebook since October 2019. I dedicate one page for each month and the format is the same.
Across the top, I write Expense, Amount Due, Due Date, Amount Paid, and Balance.
I know that some people prefer to do their budget and finances electronically, and that’s okay. The objective is to do what works for you so that you are more likely to stick to it. As a matter of fact, for everyone that my dad taught budgeting, we all still use a notebook.
Know What You’re Paying For & Write it Down
Now that you have a general template, write out each bill, how much is due and when. Be sure to include any balances and/or any debt consolidation payments that needs to be rolled over into the next month.
When my dad did his budgeting, he sat down twice per month to pay his bills and had his bills set up accordingly. He filled in each bill that he was paying, wrote a check, and placed it in the envelope with a stamp.
Nowadays, very few people do this, as so much is electronic. However, it can still be done in the modern day. All that you need to do is pay your bill online and document each time you pay.
Keeping copies of receipts to stick in a folder by month or stapled behind the page is also good practice but if that takes too much time or you prefer to keep electronic copies somewhere else, that works, too.
Write Down Your Income
Write down your income that you have coming in for that month to make sure that you have enough to cover your monthly expenses including any debt that you may be working to off.
I generally do a quick estimate to make sure that all expenses will be covered that month. If you don’t see that your income will cover your monthly expenses, brainstorm some side jobs that you can do for the month to earn a bit more income.
Some quick ideas include yard work, freelance work, babysitting, etc. These types of jobs usually pay quick cash.
However, you can also consider freelance platform work such as People Per Hire and/or Upwork. I’ve used both in the past. Other projects or businesses that you could create include starting a blog or YouTube channel. There are so many legit ways to make extra cash.
Just remember to choose something that works for you and your financial success.
Have a Financial Goal or Plan
Aside from setting up and maintaining an effective budget that you can stick to, it’s also very important to have a plan for your money and know what you are using it for, especially for disposable income and savings.
For example, when I was about 25, I bought a vending machine online and set it up in my uncle’s detail shop. Every month, I knew that the money went to restocking the vending machine first and our savings next.
Without having a plan for your money, you’re likely to spend unnecessary money that could be used more wisely.
Final Thoughts
Regardless of which way you choose to set up your budget – whether it’s on paper or electronically, the most important part is to remember to track your expenses and income. But, more importantly, choose a method that works for you.
This post is in partnership with Intellifluence.
