The Beginner's Guide To Creating A Budget That Actually Works
Budgeting might sound complex, but it's really not once you take the leap and actually get started. Plus, the payoff is worth the small learning curve.
Creating a monthly budget can put your financial woes at ease because you know exactly where your money is going and how much money you're bringing in monthly. Taking control of your finances can seem daunting, but it's worth it when you're not stressed about your ability to pay your bills on time, while still meeting your personal financial goals.
1.Set A Reminder
First things first, pick a day out of the month to prioritize budgeting and set a monthly reminder on your calendar. When life gets busy, the last thing on your mind will be a budget.
2.Set Personal Financial Goals For Your Budget
As a beginner, it's important to set personal financial goals before creating a budget. Ask yourself, why are you creating a budget? Solidify the long-term financial goals you are aiming to reach, so you can create a personalized plan of attack to conquer your goals. Everybody has a reason for wanting to clean up their spending habits. It's up to you to determine what your budgeting end goal is. Are you budgeting to:
- Save for a car purchase?
- Create or build an emergency fund?
- Pay off current debt?
- Afford a pricey vacation?
Sit down and write down your purpose for budgeting and the exact goals you are hoping to achieve.
3.Pick A Budgeting Method
50/30/20 Rule:
The 50/30/20 method of budgeting was popularized by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan. This rule offers a simplistic budgeting plan to help others reach their financial goals. The rule recommends spending up to 50% of your after-tax income on necessities and obligations, essentially fixed expenses. Then 20% of the remaining half should be allocated to savings and debt repayment, and the last 30% of the remaining half should be allocated to anything else that you want.
Zero-Based Budget:
Zero-based budgeting is a method of justifying all expenses for the period. Basically, the income minus the outgo has to equal zero for the month. After covering your expenses for the month, if you have $300 left over, then you have to allocate it towards something. For example, allocate the money towards paying off debt, an emergency fund, etc. Studies show this method of budgeting helps people pay off 19% more debt and save 18% more money.
4.Choose A Tool To Create Your Budget
Determine what tool you want to use to create and track your budget. Some people enjoy the old-fashioned pen and paper method, but in this day and age we have many technological options as well. For those who know their way around Excel, you can make a budget using an Excel spreadsheet. If you choose to create a budget, then follow these simple steps:
- Record your sources of income
- Record your monthly expenses
- Divide the expenses into fixed (same expense every month) and variable expenses (changes month to month)
- Total your monthly expenses and monthly income to understand your monthly cash flow
If manually creating a budget isn't convenient for you, then there are many free budgeting tools available to give you a hand. Mint is one of the leading free budgeting apps that automatically tracks your expenses and incoming money by syncing to your bank accounts. Mint helps you to create a budget and set goals with ease.
If you aren't interested in downloading an app or manually creating a budget, then Budgetpulse could be the perfect solution for you. Budgetpulse is a free personal finance software that organizes your cash flow, expenses, bank accounts and allows you to set financial goals.
5.Analyze And Assess Your Budget
Setting financial goals and making a budget is great, but it's important to analyze and assess your budget monthly by creating a plan to meet your goals. How much money do you need to save each month to reach your goal and how will it potentially take? If you're saving towards a relaxing vacation on the beach and you estimate that you need to save $1500, then figure out how much money you will save per month to reach your goal. If this requires you to cut back on expenses, then assess your budget for opportunities to cut-back on expenses or increase your income.
Want more stories like this? Sign up for our newsletter here and check out the related reads below:
12 Black Female Financial Gurus You Need To Follow
The 10 Best Personal Finance Books 2020
BudgetBae: 4 Tips On Building Your Wealth From A Financial Expert
Featured image by Shutterstock
- A beginner's guide to planning and managing school budgets ... ›
- Budgeting Tips for Beginners: A How-To Guide | Their Money Goals ›
- The Beginners Guide to Budgeting | Budgeting for Beginners ›
- Beginner's guide to managing your money - Money Advice Service ›
- The Beginner's Guide to Budgeting - Jessi Fearon ›
- A Beginner's Guide to Budgeting ›
- How To Create A Budget: A 6-step Guide | Natalie Bacon ›
- The beginner's guide to building a budget - MarketWatch ›
- Budgeting 101: How to Start Budgeting for the First Time | The ... ›
Aaliyah Sydonie Williams is a lover of pomegranates, intimate concerts, fluffy socks and all things R&B. She's a founder of a college advice blog, Her Little Corner, where she dishes helpful advice for college students to slay their college experience. When Aaliyah isn't eating at Starbucks, she's studying for her courses in finance, discovering new spots in the city, and brushing up on her photography skills. Keep up with her at Aaliyah Williams (@aaliyahsydonie).
ItGirl 100 Honors Black Women Who Create Culture & Put On For Their Cities
As they say, create the change you want to see in this world, besties. That’s why xoNecole linked up with Hyundai for the inaugural ItGirl 100 List, a celebration of 100 Genzennial women who aren’t afraid to pull up their own seats to the table. Across regions and industries, these women embody the essence of discovering self-value through purpose, honey! They're fierce, they’re ultra-creative, and we know they make their cities proud.
VIEW THE FULL ITGIRL 100 LIST HERE.
Don’t forget to also check out the ItGirl Directory, featuring 50 Black-woman-owned marketing and branding agencies, photographers and videographers, publicists, and more.
THE ITGIRL MEMO
I. An ItGirl puts on for her city and masters her self-worth through purpose.
II. An ItGirl celebrates all the things that make her unique.
III. An ItGirl empowers others to become the best versions of themselves.
IV. An ItGirl leads by example, inspiring others through her actions and integrity.
V. An ItGirl paves the way for authenticity and diversity in all aspects of life.
VI. An ItGirl uses the power of her voice to advocate for positive change in the world.
Let’s make things inbox official! Sign up for the xoNecole newsletter for daily love, wellness, career, and exclusive content delivered straight to your inbox.
ItGirl In Motion: Paige Shari Addison Shows Us Why She's The Hostess With The Mostess
Paige Shari Addison is the epitome of an ItGirl, which is why she is one of 100 ladies on xoNecole's inaugural ItGirl 100 list in partnership with Hyundai. Hailing from Atlanta, Georgia, Paige started her journey as a host in high school by hosting parties. Since then, she has made a career in hosting, from parties to big-name events, and she launched Strictly RNB, a platform for new artists and R&B lovers. Paige reflects on her creative path in the limited video series "ItGirl in Motion."
“My first curated event at Criminal Records was incredible. It was all for up-and-coming artists,” she says. “I needed a platform for us as a collective to be able to give ourselves the platform instead of asking for it, instead of looking for it. I was like, I want to make sure I let people get this experience that I would give as a performer but enjoy the experience with them. It was a dream come true.”
The Atlanta native also has her own line of acai bowls called Soulfull Bowls. She started it during the pandemic after events and parties shut down. But it was her love for eating acai bowls and the reactions others had to them that made her want to make it her next business move. Being open to creating new ventures in the midst of uncertainty is a bold move and one of the reasons why Paige has the “it” factor.
“Being an ItGirl means you’re just authentic. There’s an air to us. We have confidence that exudes from the way we speak, the way we put our lip gloss on, the way we walk, the way we talk. I show up as myself everytime I walk into a room. I’m hospitable, I make sure everybody’s good,” she says.
Get to know more about the hostess with the mostess in the video above.
See our ItGirl 100 list in full here. Click through the gallery below for some BTS moments of Paige and our partnership with Hyundai.
Director: Mikkoh @mikkoh
Production company: @polly___studio
Producer/AD: Samuel Cho @choboi90
Producer/Tech: Paul Nguyen @paul__winn
DP: Cristian Bernal @cristianbernal
Editor: @30inthemorning
2nd Cam: Paul Nguyen
1st AC: AJ Paug @ajpaug Gaffer: Dennis Albert @dennisalbert_
Audio Mixer: Victor Chavez @vic_the__
PA: Rick Carreno @ispeakrick
PA: Tiffany Do @tivani.doee
BTS Photo: Prime @theartofprime
Car Detail: @sud_studs @slugglobal
Creative Director @hellobosco
Team Lead @kevgumbo3000
Project Manager @zakk_jullot
Creative Producer @iamkingsheyla
Designers @miacolemxn @noelspiva
@xoNecole
Director, Integrated Marketing @_vang
Campaign Manager @kingchachiii
Talent Lead @kaylawalker
Feature image by Prime/ @theartof prime