This is the step in which we start creating a budget, first step is to create a picture of your current spending. This gives you a realistic starting point, it is important to be honest about this based on actual numbers.
Start Budget Spreadsheet
It’s time to geek out on spreadsheets if you haven’t already 🙂 So, the first Budget spreadsheet (or on a sheet of paper) you are going to work on is not the final one, but a representation of what your current spending. We need to be realistic because you need to accept reality and what the issues are in order to try and solve them.
Where to start
To start go through the prior year of spending and write down in categories how much money you spent monthly. Below are some suggested categories, but if you have more please include them or exclude them if they don’t apply.
For each item put the average monthly amount next to it and then at the bottom of that column add up all of the entries and that will give you the total amount on average that you spend in a month. To verify add up the previous months bills and expenses and see if it close to the average. If your bills/expenses are really variable you might want to also create a column for maximum spent in a month – so you know how much the most expensive month is.
Start new adventure
Take a deep breath as you look at the total number, know that it is your starting place for your new adventure. In the next step we are going to step outside of the box and come up with ideas on how to decrease that monthly amount. Stay tuned for different ways I have been able to decrease my spending.
Suggested categories
Here is a starting point for categories to start your spreadsheet…
| Home |
| Mortgage/Rent (some mortgages include Homeowners ins & real estate taxes) |
| Home Insurance/ Renters insurance |
| Real estate taxes |
| House Maintenance |
| Yard Maintenance |
| Utilities |
| Phone (Cell/Home) |
| Cable/Internet |
| Electric |
| Water/Sewer |
| Gas/Other |
| Car |
| Maintenance |
| Gas |
| Payments |
| Insurance |
| Excise Tax |
| AAA |
| Medical |
| Health Insurance |
| Dr. Appointments |
| Chiropractor |
| Dentist |
| medicine |
| Counselor |
| Physical Therapy |
| Over the counter Medicine/vitamins |
| Pets |
| Vet |
| Medicine |
| Food |
| Town license |
| Other |
| Food/House supplies |
| Eating out |
| Groceries |
| House Supplies (usually included with groceries – but not covered under SNAP) |
| Clothing |
| Clothes |
| Shoes |
| Outer wear |
| Bags/purses/backpacks |
| Kids |
| Tuition |
| School dues/events |
| Entertainment |
| Subscriptions |
| Presents |
| Vacation |
| Other |
| Business – these should be done separately since you should not combine business and personal 🙂 |
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