How to make the EASIEST budget

(video included)

Author

JC Rodriguez
April 03, 2024

Good morning!
So many of you guys hopped on the Daily Frugal yesterday, welcome! Let’s talk about the easiest and most practical budget you can start today ✊ 

DEFINITION
What is a budget?

  • A budget is nothing more than an “intentional spending plan.” It’s a plan for where you want your money to go each month.

PRACTICAL ADVICE
The 4 steps to budgeting

Step 1: List out your income

  • Just as it sounds!

  • Ex: Paycheck 1 - $3,100

    Paycheck 2 - $3,100

    Total: $6,200

Step 2: List out your expenses

  • This INCLUDES your savings and investments

  • Make an estimate for how much you plan on spending, and how much you plan on saving and investing this month.

  • Here’s the order for how you should list these out: 1) Tithing/Donations 2) Necessary expenses 3) Savings 4) Investments 5) Unnecessary expenses

    • Ex: Tithing $100

      Housing: $1,900

      Gas: $150

      Groceries: $400

      Insurance: $200

      Savings (emergency fund): $500

      Roth IRA contribution: $400

      Restaurants: $150

      Entertainment: $100

      Clothing: $75

Step 3: Subtract Your Expenses From Your Income

  • When you do this equation it should equal ZERO.

      Income - Expenses = 0

  • Remember, the “expenses” include your savings and investments.

  • So a ZERO does not mean you have zero dollars in your bank account. It means there are zero dollars leftover for you to budget.

  • If you do the formula and end up with a negative number, that means you need to cut out some of your expenses.

  • If you do the formula and end up with a positive number, congrats! You just got a raise! Make sure to put that extra income towards something, like your savings or even towards something fun.

Step 4: Create a new budget at the start of each month

  • Not every month is going to be the same! So you need to make a new budget for each month.

  • Of course, you don’t have to start fresh each time. But here’s an example, in December during the holiday season, you might need to budget for an extra $150 to go towards gifts.

  • Also, let’s make sure you understand that your estimates are going to be way off at first. On average, it takes 3 months before getting your budget even close to accurate.

HELPFUL RESOURCES
I made a video JUST FOR YOU

OUR COMMUNITY
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  • Reply to this email with any personal finance question you have, or share with me any wins in your life! (I’ll respond to your questions anonymously in future emails)