How To Budget | Budget With Me | Set it and Forget It Easiest Budgeting Method
The easiest budgeting method - set it and forget it! Download the cheatsheet on how to create your own set it and forget it budget!
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Today I am going to show you the how to create the simplest budget ever set it and forget it budget. You can literally review this budget once a year and just quickly look at your account balances monthly. The best about it though is if you decide once you start getting your finances in order that you want to look at it more closely, more often you can. So let’s jump right in!
Hey everyone, If you stay until the end of I am going to share with you a way to make it super automated so you don’t even have to think about it.
So let’s jump right in. The great thing about the strategy that am about to show you is that is can be as hands on or hands off as you want. This works so well because as you will see it sort of mimics the way people are looking at their money now, but in a way more positive light.
So the first thing to do is to open 4 separate bank accounts. At least 3 should be checking accounts and the final one should be a high interest savings account.
The next thing you want to do is pull the past 3 months of all of your bank statements and/or credit card statements, basically any place that you are spending or receiving money each month. The reason I recommend 3 months is because it eliminates the chances of overlooking things or the possibility of irregular spending. Then you are going to go through each month worth of statements and you are going to assign categories to each transaction. This could be money coming in like your paycheck, side hustle money, etc and each transaction going out like rent or mortgage, bills, dining out, etc. In the show notes below there is a link where you can get a cheat sheet that will have all of this broken down with categories. Trust me, this is the part that takes the most amount of work. Once you have this done the rest will be easy. This is also great to do because I don’t know how many people, I have helped are shocked at the amount they are spending in certain categories and it really helps put things into perspective, especially on items or areas they don’t really care about. One last thing to add is don’t not do this process because you are afraid to look at your finances. They are what they are regardless if you look at them so it is best if you take control of them regardless what they look like or how you feel about them. I promise it will 100% pay off to start doing this. Each step forward no matter how small it is, is a step toward your big goal.
Ok, once you have them categorized, then you are going to want to total up each category. Most likely things like rent or mortgage, etc will be quick, but say for dining out or gas for your car total those up so you have the total amount you spent in each category for each month.
Once that is complete we are going to go to the next step which is looking at what belongs in each of the 4 bank accounts, but first let’s go through each account so you know where things go.
The first checking account is going to be your account that has all of your bills that are approximately the same each month. This would include things like your mortgage/rent, any stable bills like your cell phone bill that rarely change or only changes slightly, this could include your utility bills, or different types of insurance that you pay monthly, credit cards, car payments, student loans, regular giving or tithing amounts, etc. You get the idea, basically all of your bills and regular monthly expenses that are more or less the same amount and that you pay monthly. In this account I would say try and have a 10 to 20% buffer. So if your bills in this account total $1000.00, for an easy number, then you would need to have between a $100 and $200 buffer in the account. That way the money is in the account for the bills that change slightly so it won’t get over drawn. If your standard monthly bills fluctuate drastically you might want to have more of a buffer. For this account literally each month, I would just take a few minutes to check what has hit it to make sure that your bills all seems within range and that they buffer is still good.
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