When it comes to getting started on a budget that you will actually stick with, there are a few budget basics that need to be established. It’s super simple and you can probably get this done in just a few minutes! I’ll show ya how!
Our family has had to learn the hard way with getting our personal finances on track, but that doesn’t mean you have to!
Learn from our mistakes and our wins and skip the hard part! I am sharing our real numbers today in hopes of painting a clearer picture to help you as you are getting started on a budget.
What you need to do is put yourself in the same shoes and ask yourself the same questions. These budget tips for beginners will help you set the basic groundwork for creating a hugely successful family budget that will not fail!
Want to a look at our monthly finances?
Every single month we share a budget update to show what changes we make to accommodate the ever changing needs of our family and as a result our finances.
If you are interested in following along on our family’s financial journey and don’t want to miss anything, then make sure that you are signed up for our weekly Pearl Newsletter!
Are you in search of inspiration and direction on life changes you need to make in order to achieve your life goals? Here are a few related articles that should be helpful to get you started!
- How to Start a Cash Envelope System for Beginners
- How to Meal Plan for Beginners
- Monthly Real Life Family Budget Updates (REAL NUMBERS)
- Save Hundreds This Month With a “No-Spend” Month
FREE Printable Budgeting for Beginners Toolkit
This is the exact method and tool that our family has been using for several years now and has helped us to pay off over $20,000 in debt on just one income, then immediately save $20,000 in one year and buy our first house!
Here are the basics of our family budget. These are the list items that for the most part remain the same every month. Follow along by collecting the same information to help you in getting started on a budget for your family!
The purpose of this blog post is to be a point of reference for my monthly budget updates to help our Pearls better understand the changes we make with all the variables of our monthly budget.
What is your income?
You need to know your income so you can figure out if you have enough cash to cover your monthly expenses.
As of right now hubby brings home about $5,000 each month and I contribute on average around $2,000 each month from my business.
In order to meet these income goals, hubby needs to work about two days of overtime each month. This will change soon with a raise hubby should be getting next month. I’ll update this post if/when that happens.
When it comes to our savings goals, we will try to make up the difference in what we need for the goal by hubby working overtime. This extra income can vary between $0 and $1,500 a month.
It all depends on our current goals. We try our best to not have hubby work too much overtime. But sometimes you do what you have to do!
What are your expenses?
Subtract your total monthly expenses and spending (we used mint.com to track our spending when we first started our budget) from your monthly income.
If you have money leftover, you are in a great starting point! If you are spending more than you make, then it’s time to look over your spending and trim off the excess.
Just to cover the basics, not including savings, we need about $6,000 each month. Watch the video for a more detailed breakdown of our monthly spending.
How can you start obtaining your unthinkable life goals?
If you are living a Pearl Life, then you are someone looking to make changes to focus on what you personally hold as a priority. Your Pearl Life is a journey to creating a life you never thought possible!
It’s more than just living frugal! A huge part of that is thinking about what your 1-year, 5-year, and 10-year goals are. How do you know where you need to focus your money if you don’t know where you want your life to take you?
Here is a look at our current savings goals. Crazy! If you would have asked us just five years ago if we thought even 1/10 of these goals would ever be possible, I probably would have started crying out of frustration!
But because we have made it a priority to stick to a budget and pay off debt, dreams we never even dreamed possible are now in our future!
I have something that is going to help you set a goal based budget! Here is a FREE Financial Unity Workbook that will help you and your spouse get insanely motivated to plan out your dream and create a path to make them become a reality! It works great for singles as well! Just skip page 2&3.
How will you get one month ahead of your bills?
You can always count on me to be 100% upfront and honest with ya! So i’m not going to sugar coat this. Getting a month ahead of your bills takes hard work. But remember that you need to make temporary sacrifices in order to obtain long term life goals!
Getting an entire month ahead of our bills is what allows us to use cash to shop for an entire month’s worth of groceries at one time. Which as a result saves us thousands of dollars each year!
Being one month ahead of our bills allows us to have the cash set aside and ready as soon as a bill becomes due. Goodbye stress!
Living off of last month’s income also allows us to have our cash envelopes stocked and ready far before we actually need it. No more balancing acts required!
How often do you get paid?
It’s important to note when you get paid because that is how you will decide which paychecks you will be using to set money aside for bills.
Hubby gets paid every other week. So we base our budget off two paychecks a month. Half our bills get money set aside with each paycheck.
My “paychecks” work in a unique way. We simply pull whatever money we need over what hubby’s paycheck is, in order to meet that month’s needs and goals.
Are you using cash?
If you can’t stick to your budget, you need to be using real life cash. Not a digital cash envelope system. Cold hard cash in your wallet!
Once our family began using a cash envelope system, it was a total game changer! All of the sudden it was much easier to stick to our budget! Ultimately, it makes spending money inconvenient and that’s a good thing!
We pull half the total cash we need from each paycheck. Then when the first of the month comes, we already have the cash set aside ready to go!
Do you know where every dollar is going?
Assigning every dollar a task BEFORE you start spending is sometimes known as a “zero based budget.” This is how I recommend starting a budget. This technique is a big deal when getting started on a budget!
Someone asked me once how we track our spending since we use cash. The answer is we don’t. We have a plan for every single dollar before it is spent. So it’s kinda like we track our spending in reverse.
Instead of wondering where the money went (how we used to manage our money), we now tell our money where we want it to go.
Every single time we get paid, I enter into our spreadsheet exactly what we want every dollar to do. I also input how much money we have in the bank to make it easy to see how much cash still needs to get an assignment.
We usually like to keep a buffer of around $30 in our checking account just in case something slips through our watch.
Bonus: How many savings accounts do you need?
Creating several different savings accounts can make keeping track of your savings goals a lot easier!
We recently switched banks from Wells Fargo over to a Capital One 360 Checking and several Capital One 360 Savings. At the moment we have 10 different savings accounts.
- Mortgage
- Utilities
- Preschool
- Master Emergency Fund
- House Emergency Fund
- Commuter Car
- Kids Expenses
- Summer 2018
- Disneyland 2019
- Couples Trip 2020
We decided to go with Capital One 360 because it is super user friendly and has zero fees! So awesome!
Our rule is we use a digital savings account (versus a cash envelope) if it is one of the follow. A long term savings goal, has a high dollar amount, or we need to put cash aside to digitally pay a bill at a later time.
The amount we put into each savings account and when depends on what we currently value as a priority. It is not the same every time. The green highlighted goals above are what we are currently putting priority on to build savings.
Anything Else?
I would love to know what else you are curious about how we run our budget? Let me know in the comments and I’ll update this post with the answers!
Thanks so much for stopping in! Talk to you soon! xoxo
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