Budgeting 101 Part 1

Unfortunately we really can’t live without money. Don’t we wish we could!!!! There are so many ways to budget your money. I have found some things that work for me so I want to share them with others to help them to manage their money smoothly.

First off you must set up your budget. To do this you have to first sit down and be very honest with yourself. You have to really analyze your needs and your wants. This can be the hardest thing when it comes to setting up a budget. Many times we think that we need something, but it is really a luxury of life. The way we decided to draw the line for needs and wants was that the needs were things we needed to live. for instance, a car. Definitely needed for my husband to get to work as he works nights and we don’t have public transportation that runs that late. now 2 cars would be wonderful, but is it REALLY a need. Can we plan our time around 1 car or get rides to go places? Yes, we absolutely can. So a second car is something on our wants list for when we have extra money to save for a few months until we have enough to buy it with cash. Another example is food. Definitely needed to live so that is something we have to honestly look at and see if we are overspending or not.

So once you have gone through all your spending and seen where your money is going you categorize them under needs and wants. Make a list literally if you need to so you can honestly evaluate yourself. This list that you make will be the beginning of your budget. It will be the way you see how much you can spend and how much you need to cut out of your life.

The next step is to actually set up your budget. I was given an excel spreadsheet form a friend of mine that has a top and bottom section to it that are formulated to work with each other. The top portion is for your income and the bottom for the expenses. This way all of your budgeting information is on one page and right there for you to compare. There are also may other pre-made budgets out there for you to use. A couple I found are HERE on the microsoft office website, HERE on the all about website, and HERE on the LDS provident living website. Many of these would also be helpful with another part of budgeting down the line also. So all you need to do is find one that will work for you. Find a budget set up or make your own so that it works in the way you need it to in the terms that you personally understand. If you don’t understand your budget or the purpose of having a budget, you will never live it, so it is soimportant to get the budget in a format that works for you.

Once you have picked one of the budgets, Print one out and sit down and fill in the needs first and see what if left over for the wants.I mean literally write it out by hand. This will help you to commit to it more fully and remember what you have promised to do. I suggest you make a list of all your wants in the priority you want them. That way when you do have extra money you have a place to put it without trying to figure out where it could go. Sometimes if you have more cash then what is required for your needs you can fill in a few of your wants in the order of importance for you. This budget will include any savings you are trying to have. It should all be written into your budget so you know how much you are spending and how much you have to work with. There should be NO excess money. everything should have a place. this doesn’t mean that you don’t have a savings, it just means you have assigned a chunk of money to the savings category. Having excess in your budget will cause you to think you have more money then you actually have, especially the first few months you are living on a budget.

Your budget may end up looking like this:

$2,5000 a month

Gas and Electric:$30.00
Household Items ( toiletries, soaps, toothpaste, ect.):$100.00
Savings: $25.00

Vehicle Maintenance $20.00


Total Expenses: $2,500

The categories you choose are up to you. just be sure that you are honestly assigning money a place to be. Also you want to be sure that you are planning for the future. you want to be planning for your car to break down or for you to have to pay for registration on the car every year. That way you don’t get to that time and are stuck with no money to cover those things that will happen, it is just a matter of when they happen.

Remember that a budget isn’t limiting you, it is you telling your money where to go so you can have more then you ever dreamed of. Try to look at it that way. Try to see your budget as a spending plan. When you plan things out they always go smoother and you are prepared for life.


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  1. Great post. I especially like your mention that you should pay attention to needs and wants when budgeting. That is so often overlooked.

    I designed a Web application called Budgetsketch when I couldn’t find any tools on the Web that permitted me and my wife to easily create and maintain a budget while I was traveling. BudgetSketch is free to use and is my way of paying forward what I have learned about personal finance.

    Here’s the URL if you’re interested or at least care to check it out:


    Great job on the post. I can’t wait for part 2!

  2. Wow, That looks great. Thanks for posting this. Thanks for offering it for others to use for free too. Hopefully others will get some use out of it as well.