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Day#6: Focus On Necessary Spending

START SAVING Challenge: Day #7

Today's easy {a little long} saving task:

• Create a realistic budget using the free worksheets below. Read Step #1 in my FREE workbook “6 Steps To A Successful Budget”.

• Read through the challenge first & download the blank template at the end to start this easy saving task.

I know most of you are wanting to run the other way when you hear the word “Budget” and that's ok. I am here to help you step-by-step and you will be a Budget Rockstar before you know it! The first thing I want you to do is take 10 minutes to read Step #1 in my free workbook 6 Steps To A Successful Budget. This is an important part of today's challenge because it will answer a lot of the questions you might be having on why you need a budget. I list the most important myths and truths about budgeting that I feel are important. So, if you haven't already received your FREE copy, make sure to download Step #1 HERE.

THIS IS THE MOST IMPORTANT DAY OF THE CHALLENGE

STEP #1: Create a monthly expense list:

In order to save money you have to be aware of where your money is going. So the first step in completing today's challenge is to write down a list of your monthly spending. I am not talking about just your recurring normal bills, I am talking about EVERYTHING! From coffee in the morning, the clothes you buy, afternoon snacks, gum, sodas – IF YOU SPEND MONEY ON IT –  YOU NEED TO LIST IT! Here is an example of what a monthly spending list might look like:

Step #2: Write how much you spend on your monthly spending list.

A Reminder…

Don't forget to include things that are not due on a monthly basis such as car insurance. For example: If you pay $300 every 6 months for your car insurance, take $300/6 = $50. That means you will list your monthly expense for your car insurance as $50 per month.

A Really Good Tip…

If you are really unsure about what you spend every penny on during the month, take out 3 months worth of bank statements. For every month, use a different color highlighter to highlight different categories. Add up each category from each of your monthly statements, add them together and divide by 3 (Don't laugh at my example descriptions – I was thinking on the fly). See the examples below.

Click HERE to print out the example for your reference

This seemed completely overwhelming to me when I first started, but you will never have a clear picture of where your money is going and where you can save without this step. So it's crucial. If you bank online, just make sure to print them off. This might seem like a lot of work, but keep in mind that the reason you look at your bank statements is not to look at regular recurring bills (bills that you pay every month and the amount never changes – like your car payment) but to really understand the spending you aren't aware of. These expenses are called variable expenses and change on a monthly basis such as clothes and beauty supplies. It's completely fine to average your numbers, but make sure you round higher as you always want to budget for the worst case scenario.

Step #3: Subtract your monthly expenses from your monthly take home pay – determine your savings.

I want you to list your monthly take home pay on top of your monthly spending list. For this step simply add up all of your expenses from your monthly spending list and subtract it from your monthly take home pay. This will determine how much you can save every month (Total Monthly Take Home Pay -Total Monthly Expense Amount = Savings). Now, I know a lot of you are probably freaking out because you are coming up with a negative number. Don't be worried, I had a negative number when I first started too. This just means you are simply spending more every month than the income you are bringing in. Everything is going to be ok – promise! We will tackle how to reduce your expenses later in the challenge. The point is just to learn about how you are spending your money and to become aware of your spending habits.

Here is an example of what your monthly spending list (budget) might look like:

When you add your expenses (spending) to your savings, this should equal your monthly take home pay. I repeat – this should equal your take home pay. If it doesn't make sure to check your math. Ok, take a breathe. I know that was a lot, but now you have the tools to really have a successful budget.

Download your FREE Monthly Spending List! Here are links to the PDF and Excel Spreadsheet (with formulas):

• Monthly Spending List PDF (is you prefer to print it out and work on it) – Download it HERE
• Monthly Spending List Excel – with formulas (I made it super easy for you) – Download it HERE

Make sure to leave the reduced amount columns blank. We will tackle this later in the challenge!

DAY #6 RECAP

1. Determine where you spend your money by creating your monthly spending list (Step #1)
2. Write down what you spend on your monthly spending list (Step #2)
3. Determine your savings (Step #3)
4. Make sure to reach out to your accountability tribe. See if they need help.

NEXT STEPS:

• Today's easy saving task is a long one. Make sure to reach out to your accountability tribe for help.

Don't forget to reach out to other TBM Family members for help, guidance, and motivation. I will be there as well helping you along on this saving journey! How is your budget coming along. Let me know about it in the comments below. Give yourself a huge pat on the back! You made it!

Here is another resource that I think might help you with this challenge: Income VS Expenses

Make sure to share your savings progress with friends. Use the sharing buttons to spread the wealth.

[tweetthis twitter_handles=”@thebudgetmom”]Today I am creating a successful budget! Day 7 #StartSavingChallenge[/tweetthis]

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NEW COURSE!

If you have been part of my previous Savings Challenges, we shook things up for 2020. Let’s resolve to have 2020 vision when it comes to seeing how we can become better savers. This year we have 24 savings challenges, two each month. These are designed to be fun. Saving should be fun because you make things easier for yourself. My course will guide you on a year of savings so you will be better off when 2020 comes to a close. Sign up for the Savings Challenge course to kickstart your savings.