Tired of living paycheck to paycheck? Want to gain control of your spending? If so, then here’s how to budget for the month in advance.
Grab a pen and paper, or spreadsheet! Carve out an evening to sit down with a glass of wine to plan your budget. It’s stressful, but spending a couple of hours before the month, will help prevent the constant nagging money stress throughout the month.
Here’s six simple steps on how to budget for the month in advance!
1. Get your starting bank account balance
First, see what you’re starting with for the month! All you need to do is log into your bank account and get the balance as of the first of the month.
2. Add paychecks to get total expected income for the month
Once you have your starting balance, then forecast your paychecks for the month. This is your take-home pay after taxes and deductions. For most people this is straightforward with one or two set paychecks per month. If you’re self-employed or have irregular paychecks this will take extra time to predict.
Want more help? Read this >> Budgeting 101: Understanding your Income.
3. List your fixed expenses
Next, list your set regular fixed expenses. Personal finance can feel out of control, but most of what you spend is known, 100% in your control, and literally fixed. It isn’t a shocker how much your rent is, you signed up for it!
Stumped on what your fixed expenses are? Here are Six Categories for Fixed Expenses
4. Pay yourself first
This step is KEY to get out of the paycheck-to-paycheck cycle. Everyone knows saving money is a good idea, but there’s your rent, internet, cell phone, happy hour with a friend, and your car breaks…. then comes the end of the month and there’s nothing left to save! Stop the cycle and start saving before you have the chance to spend. Consider savings an automatic fixed expenses monthly and pay yourself first 10% of your take-home pay (from step 1 and 2).
5. Budget for a set amount of cash each week for day-to-day spending
After you automate your savings try switching to physically using cash for your day-to-day purchases like groceries, eating out, gas for your car, hanging out with friends, etc. Studies show you spend 12-18% less when using cash versus a card.
I personally take out a set $120 cash each week. I call this weekly cash! Here’s exactly how weekly cash works.
6. Map out larger flex expenses
Lastly, to budget one month in advance you’ll map out larger or one-off flex expenses like scheduled surgeries, doctor’s appointments, car repairs, flight purchases, birthday gifts, sports or concert tickets, etc. These are cashless expenses you’ll make with your debit card! Think of this like putting a dollar sign to your to-do list.
You can reduce your money stress and stop living paycheck-to-paycheck when you budget one month in advance!
Carly
P.S. I’m going to start doing more LIVES on EXACTLY how I paid off over $35k and saved $100K by 26. I’ll show you my EXACT income and EXPENSES in my early 20ies (you’ll be shocked I didn’t earn much!).
