thehowtoproject-blog

[thehowtoproject-blog]

How To: Make a Budget

1. Evaluate income and expenses

2. Set a goal that corresponds to your financial situation

3. Set up a system for charting progress

4. Take initial action to start working towards the goal

I’m not going to lie: I’m in debt. For the past several years, life was chaotic, and I was living paycheck to paycheck. I didn’t make a budget because there was no consistency in my life, and the idea of looking at my finances stressed me out. I should have made a budget anyways, since I was already stressed out.

Earlier today, I evaluated my income and expenses, and found that 50% of my income was going to essential things like rent, car and educational expenses, and such. About 15% was going towards non-essentials- mostly subscriptions and eating out at places. I have a good bit of debt to pay off though, and am spending about 30% of my income on that. I wasn’t saving much, which I see as a problem.

So, I set a goal of continuing to spend 30% of my income on debt reduction, with 10% going into saving while only spending 5% on non-essentials. If I can find an additional way to bring in cash this year, that would be great, too.

I put all of this into a spreadsheet where I can evaluate each month’s expenses against my goals. Once it became less about money and more about math, it actually felt good, like a challenge. I love challenges.

Lastly, I paid a couple bills as well as a debt I’d been putting off. It felt great to know that, thanks to my budget, I could afford it.

[thehowtoproject-blog]

How To: Get Started

1. Analyze the situation

2. Weigh the options

3. Take action

4. Keep going

It’s two days until 2018. Snow is falling gently outside. The sheets are in the dryer. I’ve eaten an apple for breakfast... and a lot of holiday junk food. It’s a lazy Saturday, and I’m trying to plan out where I would like to be next year. For the first time in my life, I have some stability, which makes planning easier. Actually, I have an incredible job: I write “How To’s” for a living. There are so many great things going on right now- a short commute, great coworkers, a cute apartment, an interesting community. But in living alone over the past few months, I’ve realized a bunch of things I don’t like about the situation- more so about myself. I’m not eating very healthily. I’m in debt. I’m not spending much time creating or learning. Simply put, I’m not who I want to be.

So, I’ve decided to do what I do best, and “How To” my life: create a series of “How To’s” and follow them in an attempt to be in a better place in the future. I know that if I don’t make a plan, I won’t get too far.

This post is me putting a stake in the ground, taking action.

Here we go!