Simple Budget Guide Every Beginner Should Know About

Though there are many different topics your teacher talks about when you’re in school, a budget guide is a topic they hardly ever discuss. This guide will include all of the basics you need to know about. The basics that will help you feel confident when creating your budget.

If you are somebody who is barely getting around to discovering what a budget is, your brain is most likely producing a lot of questions.

You might even be rushing to do all the research you can in order to know where to even begin.

While doing your research, you might come across a budget guide here and there filled with a ton of complex information.

So much information that it causes you an unnecessary headache that makes you want to give up.

As someone who has been budgeting successfully for the last couple of years, trust me when I say it definitely does not have to be difficult.

Once you have an understanding of all the basics to be aware of, everything will fall into place.

From why it is important to have a budget, what categories to include in a budget, when to update a budget, and what a budget even is.

After reading this budget guide, you will be ready to create your very own budget that actually works.

This post is all about a simple budget guide every beginner should know about.

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Simple Budget Guide

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What Is A Budget?

A budget is essentially a money system that deals with income, debt, and expenses.

Going more into detail, it helps you:

Keep track of how much money you have coming in.
See how much money you are spending on each of your expenses.
Figure out how much money you have left after paying off all your bills.
See where you can make changes to save more money

Think of it as a blueprint that shows you how to manage money wisely in all the right ways. That way you can start your journey of practicing healthy money habits.

Though there are many budget styles out there that incorporate plenty of budget tools, there really isn’t one set way to budget.

People have different ways of approaching things. What may work for one person, may not work for you.

This is why it helps to analyze each budget example you come across.

Eventually, you will find the one that helps you reach your financial goals.

Why Is Having A Budget Important?

There are plenty of reasons as to why a budget is important.

Here are just a few main reasons:

If you find yourself drowning in debt, it can be the solution that helps you get out of debt and stay out of it.
You’re able to easily see where exactly your money is going to as well as how much.
Financial goals will be a lot easier to achieve.
Stressing out about money will be greatly reduced.
With time, you will eventually become an expert at managing that you will be in full control of your money.

As you can see, all of these are great reasons for you to learn how to make a monthly budget. Even if you aren’t struggling financially, it still helps to create one.

This will help ensure you are saving the most money you possibly can each month.

Especially if you’re trying to save money fast on a low income.

Trust me when I say that the earlier you learn how to manage money in your 20s, the better off you will be financially.

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Common Budgeting Mistakes

If you are barely kicking things off, you will most likely make many mistakes on your budgeting journey.

To prevent these from happening, it is best to be aware of some common mistakes that most people run into.

Here is a list:

Forgetting to include all expenses.
Estimating costs.
Not keeping everything organized.
Not making revisions to ensure everything is correct.
Failing to make updates as time goes on and changes happen.
Setting unrealistic saving goals.
Using the wrong budget method.

Being aware of and avoiding these common mistakes will make your budget more accurate.

It will also make it extremely easy to follow each month so that it becomes second nature to you.

Meaning, you won’t find yourself getting frustrated to the point that you want to quit and go back to your life when your budget never existed.

What Types of Expenses Should Be Included In A Budget?

Everyone spends their money differently. So you might have a set of different expenses than say a family member or close friend.

However, there are certain expenses that everyone shares and that you should always include.

The two main categories to include in your budget are fixed expenses and variable expenses.

On one hand, you have fixed expenses that don’t typically change. You usually pay these either monthly or yearly.

Examples of this type are as follows:

Rent or mortgage
Student loans
Car payment
Insurance premiums
Cell phone
Internet services
Subscriptions and memberships

On the other hand, you have variable expenses that fluctuate in cost. These don’t always occur every month or year.

Examples of this type are as follows:

Hobbies
Groceries
Shopping
Utility bills such as electric, gas, and water
Transportation
Vacations
Dining out

As you plan out your budget, make sure to be aware of how much you pay for each of these. Knowing the exact cost of these will ensure that your numbers come out accurate.

By including all of the expenses that apply to you, both fixed and variable, the better off you will be knowing where all your money is going to.

This ensures that you don’t miss a dollar when putting your numbers together.

What Tools Do You Use For Budgeting?

When a system is in place, people use tools to make sure things run smoothly consistently. Budgeting is no different.

Here is a list of some budget tools people commonly use:

A notebook
Different colored pens and highlighters
Budget calculator
Budget planner app or printable budget planner
Printable budget worksheets
Envelopes
Folders

Out of these tools, printable budget worksheets are probably one of the best tools you can use.

This is because they are meant to help you keep your information very organized.

They also make it incredibly easy for you to plug in your information.

I personally use budget worksheets and have found myself being able to budget successfully. Because of this, I created my own that are not only helpful, but so simple that anyone can use them.

If you’re interested, make sure to check them out down below.

When deciding which tools to use, it is ok to experiment with the different tools available.

Do this until you find the ones that work best with your budget.

Once you have a better understanding of which ones benefit you, stick to using them as best as you can.

Remember, people use tools in order to make things as easy as possible. So use only the tools that will make your budget easy to follow as times goes by.

When Should A Budget Be Updated?

As time goes on, there will be changes in your income as well as your expenses.

When this happens, revise your current budget to figure out what you need to update.

Here are a couple of instances when you should look into making updates:

Any time you get a raise. Certain companies will give you an annual review at the end of the year. Depending on how well you worked, you’ll get a raise. Even if you consider it a small raise, you still want to incorporate it as every bit counts.
Any time you decide to start a side hustle to make more money. Whether it be selling items on Amazon, selling digital products, or trying to make money on Pinterest or any other social media app.
Any time there is a reduction in your expenses. Part of having a budget is seeing if there are any expenses you can work on lowering. Expenses like your grocery bill or your electric bill. This is to help save even more money than you already are.
Any time your priorities changes. As you grow older, certain things start to lose their importance while others gain more of it. Let’s say you had a specific hobby that required a certain amount of money to fully enjoy it. Maybe now you no longer partake in that hobby. Instead, you want to use that money to make double the car payments. This is so that you’re able to pay off your car quicker and actually own it.

Make sure to pay close attention to when these changes happen and make updates accordingly.

How Often Should You Update Your Budget?

The frequency in which you update your budget won’t always be the same.

Many months may go by where you find you don’t need to make any adjustments.

Then, there might be a month where a lot of changes in your expenses happen unexpectedly or expectedly.

When this happens, look over your information a couple of times that particular month and make any updates.

One rule of thumb people follow is to edit their budget at least quarterly and if not, at least yearly.

The more you make updates, the easier it will become to adjust to any changes that come your way.

This post was all about a simple budget guide for beginners to use as a stepping stone when creating a budget.

It can definitely be scary starting something new completely from scratch. By following this budget guide, you’ll have an easier time creating a system that works for you.

Remember to not be so hard on yourself.

Give things a couple of months before expecting to see any changes. Any progress that you make is something to be proud of.

You got this and know that I’m rooting for you!

If you found even the tiniest bit of information from this post helpful, just know that it was made simply for you.

Simple Budget Guide Every Beginner Should Know About