Over the holidays, I realized that I was being teased by my family for constantly wanting to talk finances and give advice to others so that they can live a little more comfortably. My family was right; I wanted to share my knowledge with others and once I started, I couldn't slow down. I have been monitoring my expenses since always, but after reading some books, I have been following a little system for about a year which must be effective since I was able to buy my home. Not only was I able to buy my home, but I am still living comfortably! I am not claiming to be a financial advisor, but I can offer you the tricks I have used for myself on a really tight budget. Keep reading for a FREE blank budget spreadsheet download that I use for my own finances.
My first tip is that you need to educate yourself on your own finances. You MUST know what you make every month and you MUST know what you spend your money on every month. It's pretty simple; you need to make sure you bring in more than you spend.
In my spreadsheet, I have a column that says Week 1, Week 3, and Week 5. I get paid bi-weekly. Sometimes there is a 5th week in the month where I get paid. This happens twice a year (usually May and October). I don't include that money in my total monthly income since I just put that money towards my savings account or a bigger purchase when I get it. Essentially, I budget for living on 24 out of 26 paychecks. If you don't want to do that though and get paid bi-weekly as well, you could divide that 5th check by 6 and add that number in the Week 5 column. But since that is not how you receive your money, it might be best if you just don't add Week 5 at all. When week 5 happens, it could be a gift to yourself, spending money for the holidays, or a repair to a car. If you get paid weekly, go ahead and change the week numbers in the spreadsheet to fit your pay schedule.
It's very important for you to add all of your expenses to this spreadsheet. If you purchase coffee every morning, add it up and add it in your spreadsheet. Remember to add things such as buying a bottle of wine every week, eating out, spa services, or any clubs or memberships that you belong to. If you neglect to add one of your habits to the spreadsheet, you're just doing yourself a disservice. Get to the bottom of your financial struggle by being truthful.
If you come up with a negative number at the end of your calculations, you will now need to examine the spreadsheet to see what you can do to scale back. Do you really need cable tv or will Netflix have to suffice for now? Can you buy your wine in bulk and get a discount on it? Can you get your nails done every other week rather than every week? Can you shop at a different grocery store which may save you some money? Sacrifice sucks and doesn't feel good AT FIRST, but stick with it and you will see the fruits of your labor when you accomplish one of your financial goals. Remember, you must make more than what you spend. It's a simple equation for happy finances.
(All you need to do is put in your figures. The formulas do the rest of the work. If you need to add more categories such as clothing or eating out, just cut the total for that category, and paste it further down in that same column. The formulas will adjust on their own.)
Next up: How to Manage Credit Card Debt
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