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How To Budget So You Can Save Time And Money

Sep 16, 2018 | Budgeting | 12 comments

Learning how to budget your income is super crucial if you want to be financially successful.

But, like most people, I hate budgeting. Yup, I said it.

 
It’s the worst, so people tend to avoid it. Did you know that TWO-THIRDS of Americans DO NOT have a budget?
 
That’s crazy, right!? And a huge, huge mistake…like 100% of always.
 
If there is one thing that you should keep organized in your life, it should be your money.
 
So why do so many people treat their finances like they ain’t no thang? As if they’re not *possibly* wasting thousands and thousands of dollars each month. I’ll give you two reasons why – budgeting is time-consuming and it is stressful. It often causes arguments between partners and can control many aspects of our lives.
 
So why even bother with it all, right?
 
WRONG.
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This post may contain affiliate links.  All opinions are our own.  See disclosure here.
Like I said, keeping your money organized is super crucial if you’re looking to be financially successful.  Financial success comes down to three things:

1. having a clear image of your flow of income and expenses

2. tracking your finances to ensure responsible & efficient spending, and

3. living the lifestyle that you can afford to live

 I mean, if you don’t know how much money you’re making versus how much money you’re spending, how can you make good decisions about where your money is being spent?

In most instances (nay, all instances), you can’t make educated decisions about your finances if you don’t have a clue what your finances even look like.

So, I always, always recommend that people find a budget system that works for them and to stick to it – even if they “make a lot of money.”  No matter how little or how big your income is, you need a budget.

I mean, come on, nobody likes a money snob.

Why do you need a budget system?
You need a budget for 3 reasons:

1. To track your flow of income & expenses and make responsible spending decisions

2. To pay down debt

3. To save for emergencies and retirement

Cause lets be honest here, if you don’t have a budget – or in other words, a strategy for where your income is being spent – how are you going to do any of the above three things?

If you don’t have a budget, you wouldn’t really know exactly how much money you make and spend each month – meaning you can’t really say that you spend your money in the most responsible and efficient way possible.

And, if you don’t have a budget, you probably don’t have a very good system in place to pay down your debt as quickly as possible in order to avoid interest costs.

And finally, if you don’t have a budget, I can say with a high amount of certainty that you probably don’t save as much money as you could be and should be saving each month.

So, you’re guilty of not having a budget system in place that works for you…it’s fine, it’s fine.  We’re here to fix that for you.

We’re here to do it in the most efficient and stress-free way possible – by automating your budget with The Automated Budget System (TABS).

What is TABS?  And why you should use it.
TABS, or The Automated Budget System, is how I set up my budget so that I don’t have to budget.

Huh?  Yeah, yeah…stay with me.

Like I said, I hate budgeting…but like I also said, budgeting is essential – for everybody.

So, I took the lazy mans way out and I automated my budget, cause seriously, ain’t nobody got time for that.

TABS automates your budget by strategically setting up your finances to automatically deposit income in specified accounts and pay bills via automatic bill pay.

The reason I love this budget system so much is because it automates it.  Don’t let me confuse you, I am not the genius who discovered that all your income should be used strategically.  There are plenty of budget systems out there that use this exact method.

But, what they don’t help you do is to automate it.

Like the zero-based budget for instance.  Same idea – use all your income strategically.  BUT, you gotta take the time each month to set your budget up accordingly.  You’re still having to actually physically budget your income each month.

Not with TABS.  Welcome to the 21st century, peeps, there’s a way to make everything and anything easier nowadays.

PART 1: YOUR INCOME
First things first, before you can create a strategy for your income, you gotta know your income.

So, grab copies of your four most recent paychecks and average your gross pay per paycheck.  Then, multiply that number by four (or two if you’re paid bi-weekly) to get your average monthly income.

If you’re budgeting for your family, include all sources of income per month, such as your partner’s income, child support, side hustles, etc.

(Don’t have predictable income?  Average out your income over the last 6 months and use that as an estimate.  You’ll have to be a little more aware of your earnings each month to make sure you’ve budgeted your estimated income appropriately.)

Need help organizing your monthly income?  Check out our Budget Boss Financial Planner to score an income and expense organizer and 90+ pages for tracking your budget.

PART 2: YOUR EXPENSES
Sweet, now that you know your exact income, it’s time to ensure that you’re spending your hard earned cash strategically.

When I’m budgeting, I like to make sure I can afford me and my families needs before our wants…as I’m sure most people do.  Because of this, I like to organize my expenses into two categories:

1. Fixed Expenses

2. Variable Expenses

Fixed Expenses are expenses that you are required to pay monthly, such as rent/mortgage, utilities, cell phone, credit cards, insurance, etc.

Variable Expenses are expenses that vary in cost each month and could be decreased in cost if necessary.  For example, things like groceries, gas, entertainment, clothing, etc.

Our Income vs. Expenses worksheet in the Budget Boss Binder is super clutch for organizing all this info!

Now that you have totals for your income and expenses, it’s easy to see if you’re in the green or in the red each month by subtracting your total income by your total expenses.

If the number is a positive number, ,you’re in the green and should be able to afford your lifestyle with ease each month.

If your number is a negative number, you’re in the red and will have to adjust your spending to afford your lifestyle.

In the red?  It’s cool.  But it’s time to say goodbye to some luxuries in your life.

Evaluate your expenses and get rid of anything that isn’t an absolute necessity until your expenses are less than your income.

For instance, my family cut out cable when things were tight.  You could also trade in your car for a bike, spend less at restaurants, and take part in free activities instead of costly ones.  If you’re not willing to cut back in expenses, think about getting a second job or starting a side hustle.

Contrary, if you’re in the green, the only thing you have to worry about is how you’re spending your extra income.

Are you paying down your debt to avoid interest charges?  Are you saving for emergencies and retirement?

If you’re not, try automatically depositing a certain percentage of your income into a debt repayment account and a savings account each month.

PART 3: YOUR BANK ACCOUNTS

I know, I know!  Where’s this AUTOMATION that I’ve been bragging about?!  Well, it’s finally here!

Your third and final step is to automate your budget using bank accounts, direct deposit, and automatic bill pay.  Here’s how:

First things first, grab our Budget Boss Financial Planner and find your ‘bank accounts’ printable.

Next, list out all your bank accounts.

Then, assign each bank account with a percentage of income (that you can figure out with your income & expense worksheet).

For example, my families bank account percentages look a little like this:

  • Fixed Expenses Account: 80% (I got this number by dividing my expenses by my income)
  • Variable Expenses Account: 15% (This is the percentage of income we can afford for variable expenses based on our fixed expense account percentage)
  • Debt Repayment Account: 5% (This is the percentage of debt repayment that we can afford after all other expenses)

We’ve opted out of saving money and having personal spending money for the moment in order to pay down our debt quicker.

Once you’ve assigned your bank accounts with income percentages, simply login to your works direct deposit and have them deposit the exact percentages into each account on payday.

Then, automate your bills with automatic bill pay to be withdrawn from your Fixed Expenses Account.  Because you automatically deposit the exact amount of income that you’ll need each month into this account, you should never be short for bills.

Pretty sweet, right?

What budget system do you use?  Comment below!
Happy budgeting!
xx Michelle
THE BUDGET BOSS eSeries TO WORKING LESS
psssst.  don’t forget to share this awesomeness with your friends!
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I know, I know…who has the time to track their every expense, right?  Before the Budget Boss Financial Planner, I would download my fancy new printables from Pinterest and set off to change my poor spending habits.  I’d go to the store, spend some money, and what do you know – I never logged my spending in my budget binder.  There had to be a better way!  Thus was born the Budget Boss Financial Planner.  A fillable PDF that you can access across all your devices – any time, any place.  
budgeting, budgeting for beginners, how to budget, free printables, budgeting printables, budget binder, financial planner
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