Lots of our friends ask us how we afford to take a two week trip every three months while living on our own, and paying 3 auto loans. We both have regular, hourly paid, non commission jobs. Answer is, we budget! I feel most people think budgeting means restricting yourself which causes anxiety for some. Others may not understand where to start? But without it, Zach and I wouldn’t be able to afford these trips that we do.
If you want to start budgeting your money, here are the first three steps to take:
Begin Bookkeeping Your Expenses
I use excel to log everything related to money, like an accountant (which I’m not!) So first, you’ll need to back log your past two months to find out what you actually spend your money on. Separate it week by week to make it more organized.
Categorize Your Spending Habits
Begin a new column next to what you wrote, and write a category next to each entry. Was it food, personal spending, gas money, etc.
Once it’s categorized, add it up! Now you can look between the two months and find an average that you spend on each category.
Create A Budget
Now that you know what is your norm spending, you can budget what you want it to be in order to achieve your side goals. Subtract your bill expenses from your income and see what is left over. From there, just distribute that money between the categories to decide what you will spend your money on.
This is just a simple example, it can be as detailed as you’d like. But from here, it just takes self-control, monitoring, and patience!
Have questions? Ask us!