Tuesday Tip: Budget Series- Week 1

For the next month or so, my Tuesday Tips will center around planning and creating a simple, but effective budget. Over the last year I’ve tried various budgeting methods, but haven’t been able to find one that worked for me. It was either too complicated- so I couldn’t keep up with it, or it just didn’t really fit my organizational style. So I decided to pull things I liked from the different budgets I tried and added to them a few of my own ideas, to create my own method of budgeting. Hopefully it will be able to help some of you!

Week one of the budget series is going to focus on tracking your spending. I had never taken the time to track my spending before this, so I wanted to do so and figure out where my money was coming from and going to. I have always thought I was pretty good with my money, but after tracking my spending for the past month or so, boy did I realize how wrong I was! I found that I spend way too much money on eating out and while I don’t make a lot of huge purchases, I tend to spend my money on a lot of little, usually unnecessary expenses that eventually add up. Seeing this was one of the main reasons I wanted so start a budget system that works for me, because I want to be as frugal as possible throughout grad school, so I don’t come out more in debt than necessary.

Here are the steps I took in order to track my spending:

1. Look at past banking statements: I printed out my banking statements from the past 3 months and marked whether each one was an income or expense and then color coded them with hi-lighter by category, such as gas, food, school, etc. This allowed me to get an idea of where my money had been going the past three months and gave me an idea of what my budget categories would be.

Example of the key I used

2. Make a tracking sheet: I realized that my banking statements didn’t record all of my income and expenses, as I also often pay for things with cash. For the remainder of June I just kept track of everything I spent and earned on a scrap sheet of paper, writing down the date, what I spent money on, and the amount I spent. I found this was a little to messy for me, so I ended up creating a chart on Word, which contained the same information, but in a more organized form. I’ve been using this for the month of July and it has been working great so far. I printed mine out and put it in a “Budget Binder,” because I’ve found that I do a lot better with writing things down with pen and paper than keeping track of it on a computer. I try and right everything down right after I spend it, but this isn’t always possible, so I just always ask for a receipt and input the expense as soon as possible afterwards. Feel free to download the chart for your own use here: https://docs.google.com/document/d/16U-zi9u63-vdXAArWydeeKlRxylTzH1s36koDLC-Wnc/edit?usp=sharing

Scrap sheet of paper tracking

The much more organized chart

Be sure to categorize your spending so that when it comes time to analyze where your money is going as well as build your budget, you have an idea of what you’ll need to include in your budget. An example of some of the categories I use are: Gas, Eating Out, Clothes, Entertainment, School, and Insurance.

3. Keep that check book balanced!- I am so bad at keeping my checkbook balanced, but it is an important part of budgeting and smart finances in general, so I decided to make this another priority of my budget. To ensure I was balancing my check book at least once a week, I set a reminder in my phone to go off weekly at a day and time I know that I am usually home. Until I get a chance to balance my checkbook and add expenses onto my tracking sheet, I keep my receipts in this nifty little “Receipts” envelope I made, and then toss them out once everything is balanced.

 

So for the next week I challenge you to start tracking your expenses, whether using my method, a variation of it, or your own method entirely! One of the keys to successful budgeting is finding something that works best for you. Check back in next week for the next step- evaluating your income and expenses!  In the mean time, feel free to leave a comment below with your own budgeting tips!