How to Start a Budget

I am super excited about this post.  With the Holiday season hemmoraging money seems very common. 

As a somewhat newer married couple (3 years in April) the Hubs and I are still trying to figure out the whole budgeting thing... okay, it is mostly me, but we are learning together. 

One of my main issues when it comes to starting a budget is feeling overwhelmed with where to start.  This is where Danielle comes in!

Danielle Liss is a lawyer in Las Vegas. In April 2008, Danielle hit her financial rock bottom. Due to overwhelming student loan debt, money owed to her grandfather from his assistant when the housing bubble burst (he helped her avoid a short sale) and credit card balances of approximately $37k that she ran up due to compulsive shopping addiction, Danielle was lost and not sure where to start financially. She started working with consumer credit counseling to pay back her credit cards and by December 2010, she will have paid approximately $30,000 back in her unsecured debt. First, she learned how to budget and can happily say that she now lives with an all cash budget. (Although she doesn't use actual cash. She has a well loved American Express Zync card. She doesn't really want to go down the credit card road again.)

Q: How should one begin to budget? It feels really overwhelming - I have no idea where to begin.

To begin budgeting, I highly recommend setting up a spreadsheet. There, list all of the money that you have coming in. This way, you know how much you have to work with. Then, list your fixed expenses for the month, such as your utilities, mortgage/rent, car payment, insurance, etc. Then, add in estimates for your variable expenses. This can get tricky, so you will need to look over the past couple of months and see how much you have spent in these categories. How much do you typically spend on groceries? Eating out? Clothing? Entertainment? Then, look at the expenses that come up only once or twice a year, like holiday spending, vacations, etc. Divide those numbers by 12 and enter them into the budget so that you have an idea of how much goes toward that expense each month. (That way it won't be a surprise expense at when that date hits.)

Once you have all of those numbers entered, is there money left over or is there a negative amount? When I set up my first budget, I was really negative. I had to sit down and figure out where I could cut my expenses. I realized that I was spending ridiculous amounts on eating out and groceries, so those were the two biggest areas that I cut expenses and that helped considerably.

If you aren't a fan of making your own spreadsheets (which is a completely foreign feeling to me - it is listed as one of my interests on Facebook), there are a lot of good forms online. I highly recommend the free resources offered by Dr. Dean Burke on The Millionaire Nurse. Trust me, it doesn't matter if you aren't a nurse, he was my money coach and he whipped me into shape. He has a great budget template that you can start from.

If you use online banking, I highly recommend Mint.com. They offer fantastic budgeting tools. It allows you to sync all of your credit cards, bank accounts and investment accounts. You can create a budget online. Then, if you exceed your budget or you are coming close to the threshold that you've set, you can ask Mint to send you an email or text alert to notify you. It's a great service and one that I personally use.

Q.What is your #1 Money Saving Tip?

For me, as a recovering compulsive spending addict, the biggest thing I have to remember is to evaluate whether or not I actually NEED to purchase an item. Shopping isn't meant to be a hobby or a way to hang out with friends. I no longer shop as a way to pass the time. I no longer shop to make sure I am getting a great bargain.

For most people, I think the key is to keep careful tabs on your food budget. See how much food you waste each week. When I started keeping track, I was ashamed at how much food we were throwing away. We started planning careful menus and made sure that we accounted for leftovers (either for lunches or for another meal later in the week). We spent a lot less when we were wasting less. Also, don't buy what you don't need in the grocery store. It sounds so simple, but it really is true. For a while, I was really into couponing at the grocery store, but then I realized that I was buying things for the bargain and we ended up with so much stuff that we weren't eating. It wasn't stuff that I would typically buy. Now, I don't buy the Sunday paper and I don't coupon at all. I don't buy enough brand name items to make it worth the time or effort.

If you are eating out a lot, you can often make something healthful and tasty at home for a lot less. We stopped going out to dinner. Sure, I still want sushi on a regular basis, but there is absolutely no reason why we need to spend money to go out to eat sushi once a week. It's such a waste of money in the grand scheme of things.

Q. Is it possible to be green on a budget? (I know - not your favorite word)

People ask this question a lot. I personally think that being green has saved me a ton of money. I realize that not everyone is going to run out and buy a hybrid car (which saves me a fortune on gas), and that's not really the point of the green movement. But when you look at the little things, most of the green movement can fundamentally save you money. Reduce, reuse and recycle. Reduce - what can you cut back on? Do you need to use paper towels or can you use rags? When we switched from paper towels to rags, I saved a small fortune. Reuse - by reusing things, you are not buying something new, so you are inherently saving money. And buying recycled goods is not that much more expensive. I get recycled plastic trash bags that are also biodegradable and there isn't a big price difference between those and what you would typically see advertised by Hefty.

Think about how much you spend on the various cleaners in your house. Before I got my ionator, I stopped using all of my chemical cleaners and started making my own. Making a bottle of all purpose cleaner cost about a dollar, instead of $4 to purchase something at the store. If you prefer to buy a branded green cleaner, you can do that, but you can also discover the wonders of baking soda, vinegar, and tea tree oil. It's a whole lot cheaper.

I purchase organic food at Costco and it is much cheaper there than it is at most super markets. Here's another tip - organic meat tastes sooooo much better than meat that is pumped with antibiotics and fillers. I hated chicken until we switched to organic. The flavor is completely different.

And if going green means turning off a light or putting small appliances on a power strip so that it can be turned off when not in use, that's saving you money off of your utilities. You don't have to install a solar panel to go green. There are so many ways to do it. You can walk outside - Free. You can go to the library instead of buying new books - Free.

You control your money and you decide which companies to support as a consumer, so you can make the decision to support only those companies who are environmentally responsible. It's that simple.

Being green isn't about spending tons of money to make crazy improvements to your house so that you can be Ed Begley's newest rival. It's about awareness and doing the things that you can to reduce your carbon footprint. Growing your own veggies or composting your own soil will only save you money. Organic food will improve your health.

There are so many options. I highly recommend that people who are on the cusp of going green, but feel overwhelmed pick up a book to give them some guidance. I really liked Gorgeously Green by Sophie Uliano, because that had a real world approach. She didn't expect me to give up my a/c in the Las Vegas summers. It showed me that there were things that I could do and it gave me tips on how to do them. And how to save money. (And I got it at the local library.)

Guest Blogger 5 ~ Crystal @ Mom 4 Less

Today’s guest poster is a newer blogger, whose blog I found through Mom Bloggers. Crystal has a fun blog filled with great information on how you can be a mom and still save money. Who doesn’t like saving money. How she finds time to share all the great tips she does chasing around an active little boy, while being 7+ months pregnant I have no clue, but I will sure be asking her for tips when we decide to add on to our family.


Tell me about yourself and your family.
I have been married to my wonderful husband Zach for five years. We have a 14 month old son, and another baby boy due at the end of October. We also have two mutts we rescued from the Humane Society: a basenji mix named Scout, and a corgi mix named Thumper. I love my family and spending time with them is my favorite thing in the world.

What is your blog about?
My blog is called Mom for Less, and my goal is to help moms find great deals and save money. Rather than just post deals and reviews, I like to give my blog a personal touch and write about my life experiences as frugal mom. I currently work outside of the home full time, and my goal is to become a stay-at-home mom within the next two years. My blog chronicles that journey and my successes and failures. I really want to connect with other moms who are trying their hardest to make it work! My hope is that we can share our struggles and triumphs.

I also just LOVE the feeling I get from finding a great deal; such a sense of accomplishment! So I also want my blog to help other moms have that same feeling.

What are your top three tips for saving money?
My first tip would be, take advantage of the internet! There are entire websites dedicated to freebies, giveaways, coupons, and deals. Don't make any major purchases without first going online and looking for the best deal.

My second tip is an extension of the first - ask people where the deals are! You can do this both with your "real life" friends and over the internet. If I am looking for a good deal on a specific item, I'll send out a Tweet: "I'm looking for XXXXX, anyone know where I can find a good deal?" I have friends who work at certain stores tell me when my favorite items are going on sale. And I get at least ten text message a week from my shopping buddies: "Diapers are on sale at Target!" or something like that.

My third tip, especially for moms, is don't be afraid of buying generics or getting things second hand. Literally all of the furniture in my son's room came from other people, from his crib to his changing table. The majority of his clothes are from mom friend's with older boys. That was such a blessing when he was going through a growth spurt! His stroller was purchased at a children's resale store, and was like new when we got it. We have saved so much just by being frugal and being willing to take hand-me-downs from our friends. And our friends were happy to get things they no longer needed out of their houses!

We use store brand diapers, wipes, medications, baby wash, diaper cream, etc. and have been happy with how well they work. This is another place where I have connected with other moms to find out which store brands are as good as the name brand. I even stopped a mom in Sam's Club once to ask what she thought of their brand of diapers! I understand that some mom's have hesitations with second hand or generic things, and that is absolutely ok, but for us it has been a huge key to saving money.

Do you have any hidden talents?
I love to sing. I started college as a music major, but ended up switching to English. My singing today is pretty much limited to "Twinkle, Twinkle Little Star" and "Five Little Ducks," but I still love it!

IF you had a super power what would you like it to be?
I don't know if it counts as a superpower, but I wish I only needed a couple hours of sleep every night. There is so much I want and need to do, and so little time!

If you had a bucket list what are the top two things on there?
One of my favorite shows is Iron Chef America, and I dream of being a judge so I can taste all that delicious food. I would also really love to make it to one of the big blogging conferences! It's hard to do things like that when you have little ones, but hopefully when my kids are older I will be able to attend one.

You can find Crystal (Mom for Less) on Twitter as well as her blog, Mom 4 Less. Please head over and give her some Family and Life in Las Vegas Love!

Don't forget to head over and follow her (or any of our Vegas Headliners), leave a comment and get 2 extra entries in to any giveaway!