Own The Shift: How To Start A Budget
This article is in partnership with You Need A Budget.
As the luster of the new year kicks in and we begin checking off our goals and resolutions, it should come as no surprise that getting our finances together is at the top of our lists. Last year was marked with a lot of uncertainty, especially the financial kind, making it necessary to get our houses in order. If you were to ask anyone how to take control of their finances, they'd recommend starting a budget. For those of us unfamiliar with being on a budget, the idea of having one can feel daunting.
In addition to adjusting to checking in with your checking account to track expenses, knowing how to start a budget is foundationally a task in and of itself. There's no reason this year can't be everything you dreamed of when it comes to financial stability. Coming through with the skills to pay the bills (literally) is the personal budgeting software company, You Need A Budget. Below are some YNAB-approved tried and true tips on how to start a budget.
1. Know the Rules for Successful Budgeting.
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Before even beginning to create your budget, You Need A Budget is a firm believer in knowing the rules. More specifically, the "Four Rules for Successful Budgeting". Though YNAB provides you with a plethora of tools to get you started with a finely-crafted budget that speaks to you, your life, and your budget, they pack more of a punch in conjunction with these simple but transformative rules to budgeting.
- Give Every Dollar a Job: Allocate the money that you earn to specific needs, wants, and nice-to-haves in accordance with your personal budget. It's the difference between seeing an extra $100 in your account and blowing it immediately on food or clothes, and redirecting that "extra" cash someplace that will add more value to your financial goals overall.
- Embrace Your True Expenses: Instead of feeling overwhelmed by infrequent expenses, plan for them and treat them like a monthly "bill". This means your car breaking down, your annual birthday trip, and/or Christmas presents for everyone at the end of the year won't feel like such a blow to your finances. Instead, they are funds that you have added to in increments to fund throughout your year.
- Roll with the Punches: Don't feel pressured to stick to your budget to the T, instead be flexible and make adjustments where needed. For example, if you had a grocery budget of $200 for the month, but it ended up being $300, it isn't the end of the world or your budget. Instead, it just means being creative about making a necessary adjustment in another category to accommodate the overspending in one.
- Age Your Money: Perhaps one of the most important rules in the rule of four, this rule refers to being more intentional about the way you spend money through the goal of getting a month ahead. By doing the other three rules that were mentioned and spending less money than you earn, over time you are setting yourself up to be able to use your paycheck from the month before to cover expenses for the current month. The beauty in this is that by allowing your money to "age" and stay in your account longer, you are lessening the financial burden of feeling like you are living paycheck-to-paycheck.
2. Choose a Tool to Create Your Budget
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Perhaps just as important as implementing YNAB's aforementioned budgeting rules is choosing the right tool to create your budget. Do you want to go old school and track your expenses manually on pen and paper through bullet journaling? Do you want to crunch numbers through an Excel spreadsheet or a Google Sheet? Additionally, there are online methods that allow you to create your budget like Mint.com as well as banking institutions that typically have a "free" option built into your accounts.
Another favored option for creating your budget is the ease and use of apps as a budgeting tool. Apps like You Need A Budget allow users to create and customize a personal budget at their fingertips while allowing you to stay up-to-date with your expenses in realtime, no additional legwork or calculations needed. Once you figure out the framework you wish to utilize in order to meet your budgeting needs, you can officially start filling the blanks in creating your budget.
3. Note Your Monthly Income.
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You can't begin to track or allocate what goes out of your account month to month without having a clear understanding of what you bring in each month. You can figure out how much you make each month by reviewing your bank statements or pay stubs and calculating what's been deposited. For people with a traditional employer, this should be relatively easy. Also make note of anything you earn from side jobs or passive income streams you might have.
4. Write out Your Monthly Expenses.
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Keep stock of your monthly expenses by writing them down. Truthfully, a lot of us go through each month, and spend what we have until we're back at 0 without much knowledge or understanding of what our expenses are and exactly how much we're spending each month. Use a personal budgeting app like You Need A Budget or analyze your bank statements for a span of three months to gain insight on your spending habits over a period of time. Your monthly expenses may include:
- Rent/Mortgage
- Cell phone
- Eating out
- Debt repayment/student loans
- Credit card
- Groceries
- Car note
- Car insurance
- Gas
- Utilities
- Streaming services
- Internet
- Savings
- Travel
- Clothes
- Pampering
- Personal grooming (hair, nails, wax, etc)
- Misc
5. Create Sub-sections for Fixed Expenses and Variable Expenses.
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Fixed expenses liked rent payments or mortgage payments, utilities, car payments, student loans/debt repayment, and/or childcare are expenses that don't change month-to-month, so you can write them down with confidence, knowing that the payment for these expenses are "fixed" each month. Examples of this include:
- Rent/mortgage
- Utilities
- Student loan/debt repayment
- Credit card
- Car insurance
- Health insurance
- Car payment
- Emergency fund
In contrast, variable expenses vary each month, and though you might be spending money on the same kind of expenses monthly (i.e. food, shopping, entertainment), the amount you spend changes each month. For example, you might go from spending $200 on eating out one month, $150 the next, and jump to $400 another month. That being said, expenses like groceries, eating out, entertainment, shopping, and gas tend to fall in this category.
In your budget, assign a dollar amount that you want to act as your threshold for how much you will allow yourself to spend for the month.
6. Adjust the Budget Based on Your Needs.
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Based on the numbers you've spent in all of these areas over a span of three months, acknowledge what you're spending on each category and, based on your monthly income, adjust where needed. You might find that after all of your wants and needs are written down in front of you, you actually have a surplus of money left over which actually invites you to reallocate those funds elsewhere (like putting more money onto your debt repayment or your emergency fund, for example). This will help better provide you with a baseline and a foundation for tracking your expenses.
However, if you discover that you're spending way too much money, it might mean adjusting your variable expenses to better accommodate your fixed expenses without leaving you in the red or your bank account overdrawn. Likewise, you might also consider finding ways to increase your income.
7. Add in Your Wants.
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Now that we've more than covered your needs, it is important to make room for your wants. We are not machines and it does not make sense to create a budget that focuses so much on needs that you forget to give yourself some wiggle room to use the money you earn on yourself here and there. Most importantly, where it makes sense.
Adding in your wants looks like including room for "treating yourself", budgeting for those shoes you've been eyeing even if it means putting a little money away for four months until you have enough to buy it, or a monthly facial or massage. Whatever it is, make sure you budget for it, so that when whims pop up, it doesn't obliterate your bank account in the process.
For more information on how to make your financial dreams a reality or how to create your own personalized budget, visit You Need A Budget today.
Featured image by Shutterstock
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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.
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When discussing the topic of raising children, discipline is often the first thing that comes to mind. Children need discipline. Full stop. But what is discipline? And how do we draw the line between discipline and revenge?
The origin of the word "discipline" can be traced back to the Latin word "disciplina," which means "instruction" or "teaching." Over time, however, discipline has come to be synonymous with punishment, with parents relying on shame, fear, and/or physical pain to curb undesirable behavior.
Teaching takes time, so nipping it in the bud in whatever fashion parents deem necessary (within reason) has become the norm. But is this what’s best for children? And when does it become less about curbing undesirable behavior and more about getting our licks back for offenses we feel our children should know better to do?
In my work as a parenting coach, I’ve often heard parents say, “I asked him nicely three times before spanking him. He didn’t stop doing it until I did, so clearly talking doesn’t work.”
And the parent isn’t wrong. Talking often doesn’t work the first, the third, or the even the 10th time. And the reason is directly tied to brain development.
Children cannot and do not process information the way an adult can. Auditory processing is not fully developed until a child is 14 or 15 years old. And even then, if a child has auditory processing delays or Auditory Processing Disorder (APD), they may always struggle with processing auditory commands. According to Susie S. Loraine, MA, CCC-SLP, the term auditory processing refers to how the brain perceives and interprets sound information. Several skills determine auditory processing ability—or listening success. They develop in a general four-step hierarchy, but all work together and are essential for daily listening.
Without this understanding, discipline can easily become revenge because parents will then view their child’s misdeeds as a personal slight. Instead of teaching them to do better, parents now want to show them the consequences of not doing better. This is why it's imperative for parents to discern between discipline and revenge to maintain healthy relationships with their children.
5 WAYS TO DISTINGUISH BETWEEN PARENTAL GUIDANCE AND RETALIATION:
Understanding The Intent
Discipline is rooted in love and concern for the child's well-being. It focuses on teaching lessons and helping children understand the consequences of their actions. Conversely, revenge-driven actions stem from a desire to inflict pain or punishment as payback for perceived slights or disobedience. Parents should reflect on their motives before taking disciplinary actions. Ask yourself whether your intention is to help your child learn or to make them suffer for upsetting you.
Example: If a child accidentally breaks a valuable item, a disciplinary response would involve discussing the importance of being careful and working with the child to come up with a way to replace or fix what they’ve broken. On the other hand, a vengeful reaction might involve yelling, harsh punishment, or bringing up past mistakes to intensify guilt.
Maintaining Emotional Regulation
Effective discipline requires parents to remain calm and composed, even in challenging situations. It's natural to feel upset or frustrated when children misbehave, but responding with anger or resentment can escalate the situation and blur the line between discipline and revenge. Before addressing the issue, take a moment to breathe and collect your thoughts.
Example: If a child cannot follow instructions, a disciplined response would involve calmly explaining why their cooperation is necessary in working with the child to accomplish the goal. Conversely, a retaliatory response might involve shouting, name-calling, or resorting to physical punishment out of anger.
Promoting Growth and Learning
Discipline should always aim to promote growth and learning. It involves guiding children toward making better choices and understanding the impact of their actions on themselves and others. Effective discipline strategies include positive reinforcement, setting clear expectations, and providing opportunities for reflection and growth.
Example: If a child repeatedly forgets to complete their chores, a disciplinary approach would involve discussing the importance of responsibility and finding solutions together, such as creating a chore chart or setting reminders with Siri or Alexa. In contrast, a revenge-driven response might involve imposing overly harsh punishments or belittling the child, which can undermine their self-esteem and hinder their ability to learn from their mistakes.
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Building Trust and Communication
Trust and open communication are essential components of a healthy parent-child relationship. Discipline should strengthen this bond by fostering trust and encouraging children to confide in their parents without fear of judgment or retaliation. When children feel safe and supported, they're more likely to accept discipline as a form of guidance rather than punishment.
Example: If a child admits to breaking a rule or making a mistake, a disciplined response would involve listening to their perspective, discussing the consequences of their actions, and working together to find a solution. Conversely, a retaliatory response might involve accusations, blame, or shutting down communication, which can erode trust and damage the parent-child relationship.
Seeking Professional Guidance
Parenting is a learning journey, and, disciplining children is a delicate balance between guiding them toward responsible behavior and nurturing their growth. By understanding the intent behind our actions, maintaining emotional regulation, promoting growth and learning, building trust and communication, and seeking professional guidance when needed, as parents we can help our children built on love, respect, and understanding.
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