Each day of the series offers new tips, ideas and a challenge to start the year with a solid financial plan.
Before you can put together a working budget, you’ll need to track those non-billed expenses—groceries, gas, clothing and other spending money. Hopefully, you unearthed a pile of receipts on the first day of our series. If not, you’ll need to track expenses for a few weeks to get a good picture of where you’re spending money.
We use Mint.com to track our budget. It allows you to set budgets for spending categories, then track progress throughout the month. You can also connect your bank & credit card accounts so you can load your transactions directly into Mint. It also attempts to automatically categorize them which is pretty cool.
Except when the public library is shortened to “pub” and it categorizes overdue book fees (ahem) as alcohol.
Once you know how much you’ve been spending on everything you buy, you’ll be able to set a reasonable limit on each category for your new budget. But, not right now. For today, just go through the same process you did when you were sorting bills. This time, with receipts or bank statements, calculate how much you spend on everyday essentials, wants and needs.
We’ll dive more into the difference between those next week!
I’m not a financial planner or a budget expert. I’ll just be walking you through the steps I take each time my budget needs an adjustment. In fact, I’ll be participating myself!