You can “live on last month’s income.” With this plan, you make July’s budget based on the money you earned in June.You can solve the problem in one of two ways: If you have a variable income, budgeting gets a little harder. If you work as a freelancer, or if your income depends on tips, or in other situations, you might have very different numbers to work with each month. If you earn a salary then it stay stable from month to month.īut some people have a highly variable income.
Obviously, then, you need to know what you earn! For many people, that number doesn’t vary much. So choose a place to write it down where you can go back and look at it often to see what’s working and what might need changing in the future.īudgets are based on a simple principle: don’t spend more than you earn. (Not that I’m speaking from personal experience or anything!)Ī successful budget will be a budget you can actually consult as you implement it. Don’t write a budget on the back of an envelope and then lose the envelope. But whatever you choose, prepare to commit to using it for at least a few months.
You can use a spreadsheet (here’s our free automated budget spreadsheet, software like YNAB, or a pencil and a notebook. So for those in the same boat, here’s a step by step guide to getting started.
But in retrospect, one of the things stopping me was that I didn’t really know how to budget for any further out than my next paycheck. My budget became a tool that directed money towards my priorities and away from the random spending that was derailing my finances for no good reason. When I finally took the budgeting plunge a couple of years ago, my life changed for the better almost immediately. But take it from me: the only difficult thing about budgeting is deciding to get started doing it. And lots of us resist getting started because it seems hard, boring, and/or like it will slowly suck all the fun out of life.
Budgeting seems intimidating when you’ve never done it. The ONE CRAZY TRICK that will allow you - yes, you with the entry-level job and the student loan payments - to start a successful budget when you’ve never been able to do it before.
Friends, as a converted and frankly evangelical budgeter, I am here to tell you the deep dark magical mystical secret of budgeting.