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Budgeting Strategies for the Beginning of Each Month

Budgeting 101
What’s the first thing you need to know about a budget? That you need to have one! Why? Because you don’t truly know where your money goes without one. A budget is simply a way to plan where your money goes, and that puts you in control. And that’s a good thing when it comes to money. Making a budget you can live with is not difficult if you keep some basic concepts in mind. Here are five tips for creating a monthly budget to help you get started.

5 Tips for Creating a Monthly Budget
First, know what is coming in. That’s what you have to work with. Not just your paycheck, but any extras from a side gig, child support, bonuses, gifts, etc. Do this at the beginning of each month, because every month’s needs will be different. Add it all up and that’s your monthly income. From there, you can set up a few basic categories of fixed expenses and other expenses to determine where this income will be spent.

Second, make a budget category for fixed expenses that includes:
• rent or mortgage payments
• utilities
• phone bills
• insurance (car, home, medical, dental)
• car payments
• loan payments
• credit card payments
• child care costs
• transportation
Make a budget category for usual but not necessarily fixed expenses, such as:
• giving
• food
• saving
• personal spending money
• miscellaneous

Third, be realistic in allocating money for each category. The fixed expenses will be easy because well, they’re fixed. Where you will need to experiment is with the unfixed expenses. We won’t dictate to you how much you should put in each, but there are lots of budgeting apps available that offer guidelines on reasonable percentages for each category.

Fourth, now that you have an outline of what will be coming in and a good idea of where most of it will go, get together with your spouse or significant other and any kids who have money of their own (and could learn from you how to handle it), and strategize your spending for the month. Is there a special event you want to attend like a concert or day at the zoo? A special birthday, graduation, wedding, or other one-time event? Which category is flexible enough to adjust down a little bit and pull money out of for that event?

Fifth, stay flexible. Budgets are made to be fluid, not rigid. Yes, you need a structure, but leave room for creativity within your budget framework. When you’re prepared with a solid budget, your fixed expenses are covered so you don’t have to worry about the bills being paid, and if you have spending money and contingencies built in (like the miscellaneous category) you won’t have to worry about overspending.

When you set your budget at the beginning of every month, review the month before and how well it worked, or didn’t work, for you. Make adjustments as needed. Like we said earlier, every month will be a little different. Don’t be intimidated by those differences, you’ll get the hang of it after about three months of using a budget, and you’ll be able to plan your spending like a pro!