The (Advanced) Beginner's Guide to Budgeting (2024)

***Happy Monday, happy people! Today I’m getting down n’ dirty with budgets again, thanks to my beyond fabulous and financially savvy fiancé. I talked a lot about budgeting basics here, but now it’s time to take it to the next level. J is bringing you five practical steps to mastering your budget for life. Let’s getcrackin’!

Eek. How many of you read the word “Budget” in the title and rolled your eyes? Don’t worry, you’re not alone: 68 percent of Americans steer clear of the word altogether. It could be that the act of budgeting is just so darn complicated at times when it doesn’t have to be, or it could be that most people just don’t care. Regardless, if you’re one of those people who just needs something that works andis simple, this post should get you started right now.

(In an earlier post from E, she covered some simple steps to embracing budgeting in her Beginner’s Guide to Budgeting, so check that out before you continue reading.)

Now, whether you’re managing a $29 million budget for a city or pay from your server job at the Olive Garden, these five practical steps will you help you master your budget for life:

Unless you want to be one of those people using notebooks and your checkbook to reconcile your expenses, you need a good budget in Microsoft Excel to know how much you’re bringing in (revenues) and sending out (expenses). I found an awesome spreadsheet that I currently use that you can start with right now.

It’s the best one I’ve found since the person who developed it designed it to be extremely user friendly and adaptable. For example, the third tab – Setup – gives you the opportunity to change the categories to your desire and magically changes the input throughout the entire document.

Simple. After you get your categories filled and your revenues and expense estimates put up for the year, you have an awesome budget that will let you see your entire year. (Also, check out the Dashboard tab, which shows your monthly overview of your revenues and expenses – a neat side feature.)

When your budget is complete – this is the most difficult step! – the rest of the steps will complement the budget document to make your life even easier.

Total Investment of Time – 60-90 minutes

Now that you have a comprehensive budget, you need a way to track your daily expenses to stick to your budget. Your budget may show that you will have a certain amount of money at the end of the month – “Total Cash Flow” in the budget document – but it won’t show you when you’ll have a certain amount of money.

Enter the Daily Analysis Tracker. (By the way, this is the last Excel file!)

I’ve been using this daily analysis tracker I’ve created for two years now and it literally takes me 15-20 minutes a week to update. It manages your cash flow on a daily basis, but you’ll only need to update it once per week since you should be able to recollect your most recent purchases were during the week. I mostly use my debit card to track expenses instead of using cash and saving receipts, but it wouldn’t matter either way!

Here’s what I do every Friday-ish: I go on to my bankaccount to see what my expenses were throughout the past week. I write in the amounts and the activities and glance at my cash flow position in the second column. This gives me a good alert if I’m running low and need to borrow from my savings to cover cash flow.

Another good tip is to addin reoccurring future revenues and expenses. Think paychecks, Netflix, fuel costs, groceries and discretionary funds. Putting these items in ahead of time will keep you in the know of your money.

At the end of the month, I reconcile against my budget document from example one and readjust the amounts from an estimate to what the amount actually was. For example, if you estimated you would spend $100 on fuel but you used $125, then put the $125 in there. If you begin seeing a trend you’ll know how to adjust your estimates!

Phew. You’ve made it. The first two steps are 90% of the work. The rest is just managing your budget and adjusting as necessary.

Total Investment of Time – 15-20 minutes weekly

In my budget, I have a line item for discretionary funds that allows me to spend the budgeted amount on anything I want in life that I haven’t created a line item for – Starbucks, Rita’s Italian Ice, a movie, etc. (I don’t consider “Rita’s Italian Ice” to be groceries…) And to make it simple, I take the amount out in cash and never track it because it doesn’t matter to be what I spend that money on.

When you have a good budget (step one), let it work for you: You don’t need the added stress of tracking every tiny expense, so designate yourself a discretionary fund. It could be $10 a week or whatever makes sense for you. The key to this is it will help you stick to your budget since you’ll physically see the cash going away for your impulse purchases, and you’ll know you’re done until the following week when you’ve run out.

Total Investment of Time – Included in Step 2’s Time

I met a CEO of a local bank last week and he asked me what his bank should do to attract a younger audience. I simply said “Increase your online banking capabilities.” I don’t need great customer service at this point in life. I need somewhere to put my money and be able to take it out when I need and pay bills in a convenient way that accesses my funds in said bank. (Side note: The great customer service does come in handy when you need to go to the bank for a loan!)

If you want to make budgeting friendlier, put your money in a bank with great online capabilities. I personally use Bank of America and enjoy how I can transfer funds between accounts the same day, pay bills online, and reconcile with my budget and daily tracker. Furthermore, I can always check my account on the bank’s great app for my iPhone. I just don’t have time to wait for a monthly summary from a bank.

Total Investment of Time – Simultaneous with Step 2

You don’t need Step 5 to be savvy in budgeting, but if you want to always be in the know – and thanks, Efor mentioning an app in your post! – download a budgeting app for your smart device. I use an app called MintBills which gives me a quick summary of my cash flow, bills and credit card debt (always pay that off as soon as you can!). It’s just a handy tool that adds another layer of knowledge with your finances.

Total Investment of Time – 30 minutes

So, there you have it. In about two hours you could have your entire financial life in order – the same amount of time as watching a movie or this cat video20 times.

***HEY THANKS, J. And there you have it folks. Seriously, this guy has got it goin’ on. I mean, with my love of shopping, Ihad to have a financially savvy guy by my side, right? Ha! But in all seriousness, his methods are tried and true and work wonders for us. In as unbiased a way as possible, I recommend to the max.

And I’ll see on the hump, for a super fun collab with my friend Tiffany.

May your Monday by short and your coffee be tall!