Part 1: Where Do I Begin?
Yes, you do need a budget. Everyone needs a budget, even those millionaire athletes, you know, those that often times end up bankrupt because they didn’t have a budget. If you’ve never made a budget before, that’s okay. Hopefully, I’ll give you some useful information in this series to help you get in control of your finances. Then, once you make a budget, you have to keep track of it. I believe that YNAB (You Need a Budget) is an EXTREMELY helpful tool in keeping up with your budget. So first and foremost, you have to decide why YOU are making a budget.
Of course, I think everyone needs a budget, but if that isn’t your state of mind you may need a reason to budget. Maybe you just want to save a little money, have a major expense coming up, or are just wondering why there is no money left in your bank account days before every paycheck. And this step is extremely important if you are married. Money is a major cause of disagreements in marriage so try to get on the same page before you even begin making a budget.
So after you’ve decided WHY you are making a budget and have gotten on the same page with your significant other (if applicable), it’s time to decide on your budget categories. Dave Ramsey’s form below will help with this.
That’s just a starting point for your categories. Don’t even worry with amounts yet. Once you decide where your money is going to go, you can fill in amounts. I’ll get into all of that next week though.
Here are the budget categories we use (right now):
To Be Reimbursed
Of course, yours will look completely different. I budget for EVERYTHING. If I didn’t budget for oil changes and car tags, what if I needed both the same month and it was a total of $150.. where would I pull that from? Your categories will probably change over time–a lot if you’re anything like me.