Last week, in Budget 101 post #2, you should have gone through the process of figuring out how much debt you have. Once you have figured out exactly how much money you owe, it is time to create a budget that will help you to use your income more efficiently by covering all your bills and working towards the elimination of your debt.
You can put together a budget on paper, but I prefer using Excel. I have created my own budget template and you can gain access to that template by signing up to receive updates via email. Once you sign up, template access will be automatically emailed to you.
When you prepare your budget you need to take into account everything that you can think of relating to income and expenses. Your budget will need to be updated on a regular basis as more expenses come up and as you begin to pay off your debts.
This is why it makes it a lot easier to use a program such as Excel where totals can be added quickly and you will be able to see in a matter of seconds which direction you are going in and whether the steps that you have made have resulted in positive changes towards your financial well-being.
If you don’t know exactly how much you spend on food and other items each week then you need to start keeping track of every single penny that you spend. You can’t have a valid and usable budget if you start off with incorrect expenses!
You can make an estimate for each area until you are able to pinpoint exactly how much you spend.
Once you get some of the exact totals, you will be able to determine whether you are overspending in particular areas. And then you can decide what to do about reducing those expenses.
Your food shopping is one area where you can save a considerable amount of money because most people don’t have any strict limits on their food spending.
The reason that I started this blog was because I had just taken full custody of my two older boys and I needed to somehow cut my budget. The mortgage doesn’t change. I couldn’t save on my car payment. Car insurance was what it was. And I could only save so much money on the electric bill. I realized that the only area that was flexible to saving money was my food bill. So, I turned to coupons. And my entire financial situation changed.
Back to budgeting…
Once again changes can only be made if you know precisely what you’ve been doing in the past and where you can make the changes in the future. It might mean that you have to completely change the way you shop. But at least you’re aware of which areas you can make changes.
Budgeting is your way to gain control over your finances once again. In fact, it is the only way for you to gain control. You will not ever fix a financial situation without sticking to a budget. It is impossible. It would be like building a house without a plan. You may get it done eventually, but it ain’t gonna be a pretty sight.
Budgeting is a lot easier than you might expect and once you begin to use a budget you will wonder how you ever managed your finances in the past without having a budget.
Follow the Budget 101 process by making sure you’re signed up to receive email updates.
If you’re looking for my budget template, you will gain immediate access when you sign up for email updates.
Disclaimer: I am not a financial professional and don’t play one on tv. The information provided on Single Mom on a Budget.com is my own opinion and should not be construed as fact or advice, and you follow it at your own risk. You are responsible for your own personal finances and should not rely on this site to make the final decision for you. This blog is my means of communicating my experiences to you and to prompt you to think and consider your own situation, but you are 100% responsible for any actions you take. Always consult an attorney or tax professional regarding your specific legal or tax situation.