Did you ever put off a goal simply because you don't know where to start? If you want to run a marathon but don't even know how far that is, you may feel silly asking or you may be too overwhelmed to try.
After two tries at a half-marathon and realizing that I max out at 7 miles, I'm not going to be able to help you run a marathon, but I can help you start a budget. Sure, budgeting seems boring but it can help you figure out where your money is going and how to reach your financial goals.
Start with these easy steps and let me know if I can help you!
1. Analyze your spending. Online tools like Mint.com make this easy. Simply open a free account, load in all of your bank accounts and credit cards, and allow it to load your transactions for the last few months. You may have to spend some time sorting transactions to organize it, but it's a simple way to categorize your expenses.
Once you have a clear picture of where your money goes, make a list of the areas you should change. Are you paying bank or credit card fees that you can get rid of? Are you spending more on eating out than you thought? Did you know that much of your paycheck went to your cell phone bill? Make a note now so you can follow up.
2. Set short-term financial goals. Once you have an idea where your money goes, figure out where you want it to go instead. Do you need to save for a car or a wedding? Would you like to have a trip fund so you can pick up on a whim and leave town? It's your money! Make it work for you.
3. Where to cut? Once you have a financial goal in mind, figure out how much it will cost and how much per month you can pay towards it. Mint has great resources in their Goals section. Once you know how much you will pay per month, build it in to your budget. Bye, bye fast food lunches; hello beach vacation.
Do you realize that you now have a budget? It wasn't as hard as you thought it would be, was it? After a while, you may need to make changes because you reach your goals or your categories change. These minor fixes won't take long, especially because you already started!