The topic of money can be a very emotionally charged one. Debt is not something to be afraid to tackle or something to ignore. Just think, today is worst day you’ll ever find yourself in financially, starting today you’ll begin to understand your debt and slowly see that number go down.
Education Goals
- What Is A Budget?
- Calculate Your Income
- How to Make a Budget
- Set S-M-A-R-T Goals
- Calculate Your Expenses
- Find A Tribe
- Give Yourself Credit
Week 1.0: Tell Your Money Where to Go by Hellen Lovato
What is a Budget?
A budget is a plan where you decide how much and how you will spend your money each month.
A budget shows:
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how much money you make
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how you spend your money
Week 1: What is a Budget? by Hellen Lovato
Calculate Your Income
Calculate your monthly take home income.
This includes your paychecks and any other money you get, like child support, alimony or a side hustle.
Week 1.2: Calculate Your Income/Expenses by Hellen Lovato
Calculate Your Expenses
Calculate your monthly expenses. Sort your expenses into 2 categories:
Fixed expenses and variable expenses.
Fixed Expenses vs Variable Expenses
Fixed Expenses: Generally stay the same and are paid on a regular basis.
Variable Expenses: Are costs that fluctuates over time
Set Specific, Measurable, Attainable, Relevant, and, Timely goals for your money.
Week 1.3: Set S-M-A-R-T Goals by Hellen Lovato
How To Make A Budget
Here are 2 different ways to create a budget:
1. The 50-20-30 Rule |
2. The Envelope System |
The 50-20-30 Method
This method divides your income into 3 categories:
50% for essentials, 20% for savings/debt and, 30% for wants.
Essentials: 50%
This category includes: Rent/mortgage payments, healthcare, groceries, car payments, gas, and utilities.
Savings/Debt: 20%
This category includes: Adding money to an emergency fund
(we will go over what and why you need an Emergency Fund next week!)
Whittling down your debt.
Wants 30%
This category includes: Holidays, dinning out, trips to the movies, new clothes, birthday gifts.
Week 1.4: How to Make a Budget by Hellen Lovato
The Envelope System
This budgeting system uses a cash-based approach. You begin with multiple envelopes, each of which represents a different budget category.
Example:
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The benefits of the Envelope System
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The drawbacks of the Envelope System
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When you shop for that category, only use what’s in your cash envelope. Once the envelope is empty of cash, you may no longer spend any more money in that category.
In summary all budgets work this way you,
1. Calculate your monthly income
2. Calculate your expenses
3. Subtract your expenses from your income to equal zero
4. Track your expenses
Find a Tribe
A good budget takes a few months to get right and it will likely go through many changes. You may not get it right the first, second, or even the third time. You might break down and splurge!
That’s why we have a Tribe/accountability buddy, to guide us back and tell us honestly what we need, but may not want to hear.
Maybe join a Facebook/Meetup accountability group, ask a friend or a coworker. Whether face to face or through a group online, we all need a good support system.
Week 1.5: Find a Tribe by Hellen Lovato
Give Yourself Credit
Don’t forget to celebrate every milestone no matter how big or small!
Keep in mind that your celebration should not create additional financial burdens on you.
This is another great reason to have a Tribe/accountability buddy, to help you celebrate the wins!
Don’t hesitate to use our helpful trackers below this video!
Click the “Trackers” icon to access other useful trackers.
Week 1.6: Give Yourself Credit by Hellen Lovato
YOU GOT THIS!
This information is meant for educational purposes only and is not intended as financial advice.
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