I have started budgeting this year. Before I started I would think:
- I don’t earn enough money to budget
- How do I make a budget?
- I don’t need a budget I make ends meet (even though that wasn’t the case each month)
With a new job and a better salary I did not have the excuse of saying I did not earn enough. And with the access to the internet saying you don’t know how is a thing of the past. Making ends meet was not good enough anymore.
My problem was that I did not know exactly what I spend my money on. I also did not know the exact amount of debt that I had and when I would be done paying it off. Because I had no idea what my expenses were I also did not know how much I could safely save.
The solution was managing my money.
Easy enough said but how!
How I started budgeting
I started by just listing all my expenses per month and when I expected them to be paid. I also divided these expenses in three categories; fixed, variabel and unplanned.
Next I checked which of these expenses was necessary or could be ended.
Last year I went to a senimar for The Millionaire mind. There I learned about the jar system. The dividing of my paycheck was a foreign idea. I was advised to keep the money in a literal jar or to use my bank account to divide it. My bank have the possibiliy to seperate your money under one bankaccount. So I searched for an alternative. I found an online bank that has a free bankaccount that has the possibility of seperating your money. It is called MoneYou. I find it very handy to use.
Every month when I get my paycheck I leave the amount necessary to pay my fixed expenses and sent the rest of my money to my MoneYou account. In this account I have made multiple jars. Every jar gets a percentage of my income. It is nice to see your money grow each month.
Are you budgeting? If yes, why did you start to budget?