How to Create a Budget During a Pandemic

If it is one thing that the pandemic has taught us, it is that you should stay ready so that you won't have to get ready! Creating a budget is important because it helps control how you spend your money, how much you can save monthly, and it helps keep track of where your money is going. In essence, it helps you make better financial decisions. In this blog post, we will explain the what, when, how to, and why you should budget.

What is a Budget?

A budget is the estimation of a written plan based on income and expenses over a period of time. It is important to budget so that you won't over spend and so that you can create financial freedom. Budgeting monthly is ideal. This takes a great deal of discipline but in the end it is well worth it!

The word "budget" itself gives off anxiety vibes but it doesn't have to. Just think of it as your way of telling your money where to go instead of your money telling you where it should go. It is all about YOU having the freedom to control your money!

The first step to shifting your mindset is understanding that the word budget is just a word. It is not a life or death sentence. It is time to graduate to the next level of growth and set goals to becoming better with your money. Changing your way of thinking will change your way of life, for the better. Write the word "budget" on a piece of paper. Say it out loud. Get rid of the anxiety that surrounds it. A budget does not have to be intimidating.

Recommended Read: 3 Simple Steps to Achieve Both Debt Freedom and Financial Freedom

Write it Out

There is no such thing as right or wrong way to budget but there is a such thing as good vs. bad budget. A good budget will result in a sense of relief and control. A bad budget, however, will result in overspending and debt accumulation.

Anyone can create a budget regardless of how much you make. You can even create a budget on an irregular income and I am going to show you how. It is important to note that it is always better to over budget than under budget. Look at it as having more money than your originally thought at the end of paying all of your bills.

A successful budget shows how much money is coming in and how much is going out each month. Keeping track of this is vitally important! Set your goals, make a plan, and adjust when and where ever it is necessary.

How it feels knowing that you have a good budget…

Irregular Income Budget

Creating a budget on an irregular income is possible. The trick is that you have to work with the least amount of income that you bring home after taxes. This may provide you with a little bit of wiggle room later. Total out each of your monthly necessities. Things such as rent, mortgage, child care expense, utilities, groceries. These are all things that you HAVE to have. Take the number that you bring home after taxes and subtract it from your monthly necessities. From here you can add in bills such as transportation (because some people work from home), fun money, subscriptions, etc.

If you have any money left over after totaling out everything, give it a name as well. Giving your money a name helps to not over spend. Pick a name, a random name. Give it a name and set it aside.

Consistent Income Budget

Budgeting on a consistent income isn't much different from budgeting on an irregular income. The only difference is that you know exactly how much you are bringing home after taxes and you can include all bills when subtracting from income.

The End Result of Budgeting

The end result of budgeting is having a sense of relief and control by knowing exactly where every dollar you earn is going. You can budget as often as you like daily, weekly, and monthly.

You can budget alone or with a friend. Budgeting can get lonely sometimes so it is important to find an accountability partner who can keep you motivated and on the right track.

Your budget will not look the same as everyone else's. Everyone's life is different, everyone's income is different, and everyone's priorities are different. Your budget is solely your own.

Remember, personal finance is just that, it's personal. Comparing your journey to someone else's can be discouraging, so don't do that. You've got this and I believe in you!