Last week I asked you why you want to start taking control of your finances, and wow – each one of you is a unique budgeting butterfly. Some want to be able to retire comfortably or save for a mortgage down payment, while others want to just set up an “oh shit!” fund and finally not feel guilty about their spending habits.
If you want to have a chance of sticking to these goals, you have to know your why!
“I want to save for a trip to China in 6 months” is much more concrete than “I just want to see my bank account go up over time”
But if you’re like me, it often feels like there’s a brick wall preventing you from taking action. Where the hell do I start?!
It’s easy to think “it’s too hard”, or “what happens if I mess it up?”. Trust me, stop trying to make the perfect plan… the most important first step is to simply take one.
Before you can start making moves with your money, it helps to know how much money you actually have. And that means knowing how much is coming in, and how much is going out.
Once you know this, you can start spending less on things that aren’t really important to you and refocus your money towards your goals.
First, select your weapon:
- Pen and paper
- Software (Mint, YNAB, Quicken etc)
Which is best for you? Some people go old school with a ledger and writing utensil. Others go to battle with Excel because they already know how to use it. Personally, I recommend checking out Mint – it’s simple, automated and pretty intuitive. But because I’m all about freedom (#’Murica), below are some how-to guides for some of the above budgeting tools.
Mint (free) – How-To Guide
YNAB ($60, but worth it) – Quick Start Tutorial
Excel (free) – How to Create a Budget Spreadsheet
Note: you don’t have to account for every dollar. It’s more important to start getting a sense of broadly where your money is going rather than “getting it perfect” and tracking every last cent.
Your challenge for this week is to pick your budgeting tool of choice – don’t think about it too hard, just pick one that feels right and get started.
And of course, feel free to send me any questions/comments/thoughts you have. Seriously, I’ll help walk you through whatever it is you need… we can set up a skype date, sip on some Scotch and get our financial learn on.
Truth or Gare