in Basics of Budgeting & My Experience

Where to Start Budgeting When You Don’t Know What You’re Doing


“Where did my money go?”

We’ve all been there. You open up your bank account and see an awful small number staring back at you. Your first thoughts might be, “My account’s been hacked,” or “But I just got paid.” Double-checking your transactions, you see the costs start to add up. $9 at Starbucks, $38 at eBay (what did you even buy again?), a risky glass of wine for $11 last night at the bar. You find that your account hasn’t been hacked and yes, you did just get paid.

We adapt to our spending habits, and our spending habits adapt from our income. When you get a raise, what do you do? Do you adjust your lifestyle to this raise or do you keep living as if you had less? You’re not alone if you chose the former.

If you are not in the habit already of restraining your spending, you may find that you’re living just within your means or even over. That’s what happened to me – I started a new job at 22 with $10,000 in the bank saved. Within 1 year, I had hacked away at my savings until I only had $3,000 – and I had barely even noticed at the time. I was working fee-for-service, buying my lunch on the road during the week, and occasionally buying new clothes and toys for work (I was an ABA therapist for children with Autism Spectrum Disorder). I realized that I couldn’t maintain – even if I had cut back my spending tremendously. When I got a new job (even with an hourly pay cut!) and started paying attention.

On January 1st, 2016 I began tracking every single dollar that I spent and earned. By the end of 2016, I not only maintained my money, but I saved myself $3,000. You can download a template of an Excel spreadsheet like the one I used for free here. You can make your own, of course; but if you like to micro-manage, this may be just fine for you.

To start budgeting… grab a piece of paper or download my printable, either way you are on your way!


This is what my budget looked like at the end of 2016. Don’t worry, yours doesn’t have to be as intense!

 Find Out What You Have to Work With


List your income after taxes and deductions. You can’t spend the money that’s already been taken out in taxes, so don’t bother listing it. What you have to work with is your income after taxes. I recommend having one category for income that doesn’t change, and having another for income that does change. Example: you take home a salary at work, and you receive varying mileage reimbursement or you have a blog. You should list these items separately, because you can’t rely on variable income the way that you can with steady income.

List Your Bills & Static Payments


We all have these horrible things called “bills” – and paying these are non-negotiable (though many of your bills probably can be adjusted and reduced). As disheartening as it may be, you need to get a picture of what, exactly, you are paying out every month. List every bill that you pay: rent, your car payment, cable, student loans, etc.

I prefer to list only the static (non-changing) bills in this category. You will have to decide if you want to consider variable necessities (food, gasoline/bus far) in your bills or spending money. I prefer to list gas and groceries in my leftover money, because these are not set in stone. You can cut your spending when it comes to these domains, despite the fact you will always need food and transportation.

Do a Little Math

Your Income (after taxes) – Static Bills = Available Money

This is what you are left for everything else.  Hopefully this is at least have of what you started with. If it isn’t? You have a couple of options.

You need to either increase your income or decrease your expenses. If you love, love, love your job – then you probably should stay there. Being miserable is worth no price. I came to my current job taking a pay cut, but I would have it no other way. This doesn’t mean you can’t increase your income. Pick up a few side hustles. Here are four that I tried last year alone. Some will not work well, and some you may fall into nicely.

If you simply can’t increase your revenue, you need to cut back on your bills. See if you can consolidate your loans, lower your car payment, get rid of some of the extra cushioning you have in your car insurance (at your own judgement). Do you really need cable or can you get away with Hulu? Are you paying for added insurance at work that may be redundant? Chances are, you can cut your expenses somewhere, you may just need to be creative.

Estimate Your Other Expenses


I think estimate is the key word here. Your expenses are going to change from time to time. You may spend $200 on food one month, and $130 on food the next.

Before you start getting into the nitty-gritty of budgeting, you need to have a general idea of how much money you’re spending in each department per month.This is by no means a goal or limit, just an idea to start off your first month.

Calculate Your Debt


This is the darkness before the dawn, so just stick through it. This will either make you feel overwhelmed or hopeful. When I add up my debt, I become highly motivated. Try not to get too discouraged. If you have outstanding debts, it may take some time, but you can certainly pay them down.

Some of this debt will be chipped away at automatically through your bills (like student loans or a car payment), and some of this debt you need to have the added money allocated to pay (credit card debts, etc.). What you want to do about your debt in regards to your budget is up to you, but I believe it’s important to have a realistic picture of exactly how much you owe.

Track Your Baseline for the First Month 


As someone who was a Behavioral Therapist, I believe in the importance of knowing your baseline (your average behavior, without intervention). To do this, you need to just keep track of what you spend in your first month. Make categories as you go, for example: clothes, travel, restaurants, gas, etc.

Why bother getting your baseline? You need to start saving now? Here’s why I say this…

If you don’t know how much you typically spend on anything in a given month, you might be setting yourself up for failure initially. I didn’t know, for example, that I typically used to spend $350 per month on groceries and going out to eat until I started keeping track.  This $350 per month reflects my conscious effort to spend less on food in 2016. How much could you be spending if without even realizing?

Like I said, just keep track for the first month to see what you’re typically spending. This will give you a better starting point to determine how much you should give yourself for each category.

Why a month? You will mainly pay your bills monthly, so why not track monthly for ease?

Choose Your Budgeting Strategy


Here’s where you can really have some fun. There are so many different ways to budget out there; many for those that want a low-maintenance budget and many for those that like to micro-manage every dollar (I’ll raise my hand). No one can tell you what to choose, you have to find out what works best for you.

You can budget via the 50/30/20 rule, you can require yourself to put away a certain amount of money every month, or you can limit each category of your spending to a set amount every month.  Something out there will work for you. Or you could always do what I do….

I track my spending – every dollar in and every dollar out. This is not a “budget”, but I find it highly effective. As I mentioned, you can download a template of what I use here. I don’t like to give myself limits for each category because I don’t feel that it gives you the flexibility of life. Emergencies will happen, or if you host a dinner party you might go over your grocery budget – and that’s okay. You can always cut in other ways.

Just by tracking my spending, I saved myself over $3,000 last year. Imagine if I hadn’t splurged on a European vacation, $800 worth of tattoos, and two week-long vacations up north in the mountains? I would have saved well over $5,000 just by knowing where my dollars were going!

If you are brand-new to budgeting, please tell me what you think in the comments below. I would love to hear your thoughts. Everyone starts somewhere, and this is what has worked for me. I hope you equally find success in it!