I would be lying if I said I was good at budgeting. The truth is that I've been budgeting on and off for years, but was never able to follow it. Maybe it's the "I'll do and buy what I want now and figure it out later" mentality. When I was single it worked for me, I would travel, spend money on my credit card, and then pay it off by working.
Now, I'm no longer single and my financial future is not good due to my spending habit during my younger days. In the past few months, I really had to sit down and figure out how to budget and how to stick with it because I got a new car and a pay cut to work my dream job.
What I wish I knew before I started budgeting
It has been a couple months since I started budgeting and these are the 8 things I wish I knew before I started budgeting.
Mental state of mind
It might be hard to believe, but money and the mental state of mind goes hand in hand. There are several feelings that can be linked with money. These feelings can really affect your psyche.
Shame - Being embarrassed can cause a spiral in your money spending habits such as saying yes to a social event when you want to say no.
Helplessness - The feeling of not being able to control your money can cause you to make a decision that will make it worse such as getting a loan to get out of debt.
Anxiety - Being anxious about money can overspending, hoarding, depression and more.
Guilt - When you start question your purchases, whether big or small.
Sheer will power
It's easier said than done. It's difficult to say no to things that you really want. When I was in my 20's, I budgeted (many times), but it never worked. I always ended overspending anyways. Why? because I didn't have to will power to say no to social events, to food, to traveling and basically I just couldn't say no to living my best life.
Environment
Believe it or not our environment matters when it comes to money and budgeting. If your room is cluttered or have items you don't like, it can make you feel dejected and not want to do anything.
Last year, my boyfriend and I moved into his parents place and into his old room. His room is NOT small, but we had two desks, a bed, a workout bench with weights, a mini fridge, and a wardrobe. We didn't have room to do anything and we were feeling dejected. So we started decluttering not only our finances, but also our room.
A good rule to keep your environment from cluttering is "one in one out". For every item you buy, you remove one.
Take a deep breath
Budgeting is ALOT and you don't have to do it all in one day. So take a deep breath, take a break if you have to. Otherwise, it's gonna stress you out and you won't want to budget.
Organization and Systems
An important part of budgeting is having an organization and a system because it can get confusing and frustrating. That's why I'm using You Need A Budget (YNAB) to organize and create my system of assigning every dollar.
Creating a system makes it easier to know where your money is going and that will help you save, invest, and pay off debt. So that you can live your best life without stressing out about money.
Expenses
Now it's time to gather all your expenses from all your spendings. You can write it down on paper or use excel. Write down what you bought and how much it cost. From subscription to everyday purchase.
This will help you be more conscious of what you buy and the things you have. The next step is to figure out what your needs and wants are.
Needs and Wants Identification
It's important to identify your wants and needs because what you need might be what you want and you want might be something you need. It sounds confusing, but it's something that you need to think about.
I recently moved my room around and I want to get a sofa because I created a lounge space for relaxation. I didn't want to spend money on a new couch because it's something I want and not something I need. So I used a wooden bench and put blankets over it to try and make it more comfortable.
But in reality, I need that sofa so that the area can complete as a relaxation area.
Everyone has different wants and needs, but at the end of the day. Knowing what you want and need can help you with your budget.
Congratulate yourself
If you're reading this, then don't forget to congratulate yourself because you're taking the first step to budgeting and financial freedom. It's true that it's easier said than done, but if you take a deep breath, organize yourself, and be mentally prepare...budget will become another habit and you will no longer have to feel guilty when you spend money.
If you set up your budgeting journey a little bit everyday, you can have your budget set up the way you want in no time.
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