Are you ready to start budgeting?

You’ve read through What is a Budget, and maybe you’ve even set up a Holiday Budget, but now you are ready to settle in and set your budget! What will the first steps be? We are going to figure out our why and set some goals. And I’ll give you homework for November’s blog. 

First, grab your budgeting worksheets so you can fill them out as we go.

We want to determine our why. Why do you want to budget? Why do you want to get your financial life in order? You can have one why or many. It really depends on what you are doing this for. If you are making a budget because it’s what you’re supposed to do, you will most likely fail. If you sit down and think about your why and realize you want to start a budget to stop living paycheck to paycheck or to help teach your children about money so they don’t struggle as you did, it will be easier to stick with your budget. 

Me, I want to get my finances in order so I don’t have to stress about money. I want to make sure I have enough to fund the experiences I want to do now and well into my retirement. I want to enjoy my retirement and not have to work full-time until I die. 

We will all have different whys and they will change over time.

Next, we are going to set our goals but first, we are going to answer some questions. You should be honest with yourself. No one else is going to see your answers. Your worksheet has space to answer these five questions.

  1. Think about your current financial situation. What is one thing you could do to improve your financials? How would your life change if you fixed just that one thing?
  2. What are your financial hopes and dreams? Think about the little things and the big, pie-in-the-sky stuff. Don’t limit yourself. Where do you want to be?
  3. Start a list of how you can improve your current finances. What could you cut out? What could you work to spend less on? Remember, this shouldn’t be all or nothing. You don’t want to cut everything all at once and end up feeling deprived and going on a spending spree. Can you make coffee at home? Maybe investing in a fancy coffee machine and some supplies would help save in the long run.
  4. What obstacles do you have? What are your money fears or limiting beliefs? Write down each obstacle and try to think of two or three solutions for each.
  5. Imagine how you will feel when you have reached your goals. Write it down. Reference it often, especially when you are struggling.

We have our why. We have taken some time to think about and answer the five questions. Now we will set some goals. We will decide on a few goals and pick one primary goal to work towards first. As stated above, we don’t want to go all in and get burnt out or feel like we will never reach our goals. Once you feel you have a good handle on goal number one, you can add in goal number two. You can also reach goal one and then move on to goal two. It will really depend on you and what your goals are. 

Of course, you will be reviewing and updating your goals as we go along. I tend to look at my goals every quarter and see if they are still relevant or serving me.

What kind of goals can you set?

  • Pay off credit card debt
  • Build an emergency fund
  • Stop living paycheck to paycheck
  • Plan for retirement
  • Improve credit
  • Payoff home or car loans
  • Start, or increase donations
  • Start investing
  • Write a will

Those are nine basic examples of the types of goals you can set and work towards. If you have credit card debt, you may want to start there. Write down your top three goals on your worksheet. 

First, pick the goal you want to prioritize. We will use credit card debt as our example. We are going to answer a few questions. Not all of these will be applicable to each goal so if you don’t have an answer for something it’s ok! Move on to the next one. And sometimes, you need to put in some work before you can answer! That is totally ok, make a note that you will come back after reviewing some resources. 

To start, answer the who, what, when, where, why, and how.

Who? You and your partner need to be on the same page. What? Pay down debt. When? We will start on our next credit card due date and it should take us six months to pay off. Where? Not applicable. Why? To have financial freedom. How? We will review the different methods and pick the one that works best for us. 

What do you need to accomplish this goal? What resources or supplies do you need? For your credit card debt, you may need all your current statements. You need to know what you owe and the interest rates. Are there any skills I need to brush up on? For the debt payoff, probably not. What do I need to learn? You need to learn HOW you will pay off the debt. Should I do the avalanche or snowball? Something different? You will read up on different methods and philosophies before deciding. You may want to try an online calculator to see which will pay it off fastest or with the least amount of interest. 

You’ve reviewed your resources and have decided to start with the snowball method. You think paying off the smallest debt first will give you a boost to keep going. You can update your how section now. 

Lastly, we are going to take each goal and break it into smaller, manageable steps. 

For our debt payoff, we will list our debts, minimum payments, and interest rates. Grab a notebook or spreadsheet and list your debts in the order you want to tackle them, based on the snowball method (smallest to largest).

We now have all our debt info in one spot. The next step will be to determine how much extra we can pay for our first debt. Maybe you can pay an extra $50 a month. Make a note on your list or spreadsheet. For me, my next step would be to write the bill and new payment amount on my bills calendar. Then when I go to pay bills, I’d consult my calendar, see my planned payment, and set up payment. You may go in and set up an autopay right away so you don’t forget. You may also set up the other card’s minimum payments at the same time.

Your steps may look different than mine. We will all have different small or manageable steps depending on how our brains work!

Let me know what financial goal you are going to prioritize in the comments.

I used the credit card payoff as an example because that is my main goal right now. I am also building an emergency fund but it is not my primary goal and is not where my focus lies right now.

Next month we will tackle starting our budget! Your homework is to gather your bank statements, credit card statements, and paychecks from the past three months! You will need them to figure out where the heck all your money is going!

Need a visual walkthrough of all the steps? Head over to YouTube and watch the video version (and don’t forget to subscribe so you don’t miss all the other budgeting videos that are coming)!

Categories: Planning


Jenna Volden has a degree in business and has spent the last 10 plus years working for others. She believes it is time to start her own photography and writing business. She enjoys running, coffee and helping others achieve their goals. Gluten-free foods are a lifestyle, not a choice, for her due to celiac disease. She is currently based in Phoenix, Arizona.