How to Start a Budget

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!

In defense of gift cards

Christmas is only a week away and many people still have a few gifts left on their list. Over the last few years, gift cards have gotten a bad rap for being impersonal and not thoughtful. However, let me waste a few minutes of your Tuesday to let you know why I think gift cards are the best gift.



1. I like to budget, which often means I don't have a lot left over to mindlessly shop for myself. Shopping used to be a hobby of mine and I would love to be able to do this without the guilt of wrecking my budget.

2. We have too much crap and we usually can't wait to buy what we truly need. While I know you put a lot of thought into the house plant or the pair of earrings you got me, chances are if I really wanted it, I would have already bought it. Also, odds are your gift will end up in the back of my guest room closet.

3. The things I am waiting to buy are too pricey for me right now. Your gift card will get me closer to my savings goal and get that big gift sooner.

You have seven days to figure out the perfect gift for your cousin/co-worker/in-law.  I say go for the gift card.

Zooey and Personal Finance

We generally don't look to Hollywood for money advice. With paydays that eclipse what most of us make in a year, it's a place of excess. Fancy foreign sports cars, designer clothes, and huge jewelry would sink us pretty easily. Even still, many celebrities end up filing for bankruptcy or losing homes by giving into the hype and spending outside their generous means.

Imagine my surprise, then, when I came up when I formulated this blog post. I found your Hollywood personal finance role model: Zooey Deschanel. 

No, really. Zooey and her husband recently announced they were divorcing and, as part of their court filings, Ms. Deschanel attached her income and expense statement. Zero credit card debt, millions in investments and she only spends about a quarter of her monthly income. 

Yes, she's still spending over $20,000 a month, but she's done what so many of struggle to do: live below our means and invest in our future. And, I might add, she's still fabulous. She's certainly a financial role model to me. 

Do the Hard Thing: Budget

I've worked in Political Communications for about a decade now. For all of those 10 years, I've heard politicians use one line when they discuss unpopular budget cuts:

"The economy is rough. Every family is sitting at their kitchen table right now, making cuts to their family budget. We are called to be financially responsible, too."

I completely agree with the sentiment. Government should spend, at a minimum, what they bring in but should also really only spend what they need and return the rest to taxpayers.

However, how many families are really tightening their budget? How many have a budget?

Many conservatives like to say the debt Washington politicians have accumulated is "passing debt to our grandchildren." Personal debt may be even worse. You're mortgaging your future dreams for your current passing fancy.

Ten years from now, I may decide that my life long dream is to open a restaurant, open a business, or move to Colorado. By then, I may be able to travel to the moon. When I decide what those dreams are, I want to be in the financial situation to make them happen.

If you're struggling with personal finance, now is the time to take control. Remember, spending more than you take in is only spending your future.

Personal Finance Tools:
Mint.com
LearnVest.com (Love their boot camps!)