Budgeting 101 — Taking Control of Your Finances

The Wake-Up Call

“What a disaster!”

I stared at my first disability check in disbelief.

My income had dropped to a quarter of what it had been when I was working full-time. But my expenses? They hadn’t changed one bit.

“How can I pay for all this with that?” I thought. The reality was clear: it was time to learn how to budget.

The first few months were brutal. I had to make difficult choices — deciding which bills to pay now and which to set aside for “next time.”

It was a painful process, but eventually, I figured it out.

Budgeting was tough at first, but it became the key to reclaiming control over my finances — and my life.

Setting Up a Budget

The turning point came when I created a simple spreadsheet. Here’s how I got started:

1. List Your Income
— At the top of my spreadsheet, I wrote down my current income — just a quarter of what it had been.

2. Identify Fixed Expenses
— I listed all the bills and debts I had to pay each month, like my cell phone bill and any lingering debts.
— My approach was simple: I paid these fixed expenses right after receiving my check. This ensured I wouldn’t have to scramble to cover them later in the month.

3. Track Variable Expenses
— Next, I wrote down variable costs like groceries and gas. These were essential, but the amounts changed month to month.

4. Categorize Discretionary Spending
— Finally, I noted all the “nice-to-have” expenses, like treats, dining out, or a daily iced coffee. These weren’t essential but added joy to my life.

Tracking Expenses Daily

Budgeting wasn’t just about creating the spreadsheet — it was about sticking to it. Every evening, I updated my budget by entering the day’s expenses.

This small habit made a big difference.

It helped me see exactly where my money was going, track how much I had left in each category, and adjust my spending if needed.

For example, if I noticed I was overspending on groceries, I’d cut back on treats for the rest of the month. It was all about balance.

Reaping the Rewards

Budgeting wasn’t just about survival — it gave me freedom. By sticking to my budget, I was able to:
- Go to the movies and enjoy steak dinners once a month.
- Treat myself to a massage or a fun day trip to New York City or Boston.
- Spend quality time with my daughter, like grabbing iced coffees together.

Budgeting took me from worrying about making ends meet to enjoying the things I love. It gave me peace of mind and control over my money.

Why Budgeting Works

Sure, budgeting takes time and effort, especially in the beginning. But once you get the hang of it, it becomes second nature.

It doesn’t matter if your income is large or small — what matters is how you use it.

Budgeting helped me pay my bills, eliminate debt, and even have some left over for fun.

Your Turn: Take the First Step

If you’re feeling overwhelmed by your finances, take a breath. You’re not alone, and you can turn things around.

Start small — list your income, track your expenses, and stick to a simple budget.

Budgeting transformed my life. Why not see what it can do for yours?

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How to Use the Spreadsheet
1. List Your Income
— Start with your total monthly income at the top.

2. Break Down Expenses
— Divide your expenses into three categories:
— Fixed Expenses: These are non-negotiable bills like rent and utilities.
— Variable Expenses: These are necessities like groceries and gas, but their amounts can vary.
— Discretionary Spending: These are optional items, such as entertainment or dining out.

3. Track Spending
— Update the “Spent So Far” column daily or weekly.
— Use the “Remaining” column to see how much you have left for the month.

4. Adjust as Needed
— If you overspend in one category, look for areas to cut back.