Budgeting For The First Time Doesn’t Have To Be Scary

It’s time to make your first time budget. It can feel overwhelming and scary, but these tips and tricks can tackle the stress in easy ways.

Apps

Apps offer a no-excuse way of starting a first time budget. One of the most popular and user-friendly apps available is Mint. Once you link the debit or credit cards you want to keep track of on your app, it begins categorizing all transactions for you. The transactions are held accountable to a set budget which the user can tweak to meet his or her needs. Plus you automatically get notifications when you go over budget in a category. Talk about being held ACCOUNTable. (Haha accounting jokes)

An app that allows more user involvement and may be helpful for sticking to a first time budget is from the app “You Need A Budget.” They allow for direct download of transactions from largely recognized banks. If you use a small local bank, you will have to manually enter your transactions. Not only is this an app but there’s a desktop version that might help you digest information easier. This program is perfect for a first time budget that involves two separate accounts such as you and a significant other. It lets you set budget goals and track your progress to achieving them.

Apps are the perfect way to automatically start off your first time budget. They are mobile and often do a lot of manual effort for you. There’s plenty on the market you just need to find which work best for you.

Follow The Common Budget Percentage

Okay, so you’re ready to make a first time budget but how do you even know how much money goes where. Well, there’s a common percentage split that’s often used for any budget.

Housing 25%
Food 10%
Entertainment 10%
Savings 10%
Transportation 10%
Clothes 5%

Try out these percentages for two months for your first time budget and then adjust to your specific needs after. Calculate these percentages from your monthly income. That’s the easiest first step. Once you know how much money is allocated in each category each month, it’s up to you to hold yourself accountable.

This hands-on approach is ideal for someone ready to truly tackle the first time budget.

Online Templates

Everyone wants to be perfect with their money. So there’s plenty of free online templates perfect for the first time budget builder. Places like Google Drive and Microsoft Excel often have built-in templates available. They are often basic templates and are a great way to look at your current spending habits. These templates help the first time budget builder see if they are spending more than they are making, breaking even, or on their way to saving even more money.

A dedicated individual can maintain this method and manually input all their transaction. The best way to start is set yourself a schedule. Pick what day of the week you’ll sit down with your template and enter all your receipts and paid bills into the template. Decide if you’re able to do this weekly, bi-weekly, or once a month.

You’ll have to decide what schedule works best for your fist time budget. It might be better to start with once a week. Having to manually input your transactions makes the money disappearing a little more real.

It’s easy to swipe a card and forget about it three seconds later. Or even order something online and never even have to touch your card. But physically seeing how these purchases are affecting your income after you manually input them can quickly change some spending habits.

Cash Envelope

If you aren’t comfortable syncing your bank account information to an outside source, or don’t want to hold onto receipts and duplicate transactions, the cash envelope method might be a good option. This is a great first time budge hack that really makes you pay attention to what you are spending.

It won’t necessarily be convenient for bills or housing, but this is a great way to control your other expenses such as groceries, transportation, and “fun,” activities.

The idea is to set an amount for each category and pull the cash out of your account each week. You can purchase special envelope wallets that separate the money into different slots or you can just use a regular envelope. Whichever you’re more comfortable with for starting this first time budget method.

The act of physically seeing money disappear is a great psychological tool and might make you double think splurging on a $5 coffee for the third time this week. It requires discipline and routine like many budgeting strategies. But there’s something about physically seeing cash disappear that makes you want to hold onto it a little tighter. Plus once the money’s gone for the week it’s gone. You need to be strict with yourself to only use the cash for the week.

This first time budget method might be great if you’re just dipping your toes into budgeting and want to get a handle on the extra spending or fun spending. Once you buckle that down it’s easier to get everything else in line.

Auto-Pay Through Your Bank

This method can be set up through your bank account. It’s a great way to build your first time budget and ensure bills are never missed, which is essential for any young person building a credit. You can set your account to automatically draft your payment amount on the same day of each month.

There’s a catch though, you need to make sure you have enough funds in your account before the payments draft. This is important so be sure to align your bill due date with your payment date. An overdraft in your account will become a huge headache and create more chaos in your first time budget than calm.

Books

If you’re more of a research-oriented, I need all the information before I take any action, books are a great resource for building your first time budget. If you need specific advice, there’s likely a book out there to fit your needs.

Especially for building a first time budget. Many finance gurus want to start helping young people get a hold of their finances before it’s too late or take an extreme amount of work. There’s books geared toward millennials and one of the trending books on Amazon right now is Clever Girl Finance: Ditch debt, save money, build real wealth. The author also has a podcast if you’re more auditory than visual.

The best thing about these books apart from the practical tips inside is they often have templates and layouts to get you started building your first time budget.

Let us know what your experience has been building your first time budget below! Are there any other tips you discovered or ones you’ll be using for this article?