A lifestyle blog wanted to focus on personal finance and create a relatable blog post about budgeting. The intention was to make it relatable and on brand by sharing their own personal journey with money and provide relevant advice that would grow their email list. The target audience was 20-30 year olds looking to learn how to budget.

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Hey there! It’s a new year and a new decade (how the heck did that happen?). Whether you’ve gotten yourself into some bad financial habits over the last few years, overspent for the holidays, or just want to get a better handle on your budget, this post is for you. It’s time to get your finances under control and create an effective budget.

I think I know better than anyone when I say that it’s easy to fall into bad patterns financially. It’s possible that you were never taught the right way to handle your finances. Maybe you got a new credit card with a tempting limit and you took advantage of it in all the wrong ways. Now you’re stuck paying down that debt you’ve racked up or are living paycheck to paycheck. 

When I quit my job a few years back and tried to make it as a full-time blogger (with no experience I might add), things didn’t exactly go my way. Before I quit, I had paid off my credit cards, partially with a debt consolidation loan and partially with bonuses I had earned. The only debt I had was my student loan, my car, and the debt consolidation loan I had gotten. I also had about $5,000 in savings, plus about $20,000 that I could get liquidated from my 401K. 

The reason that I quit my job, aside from it literally sucking the soul right out of my body, was that my boyfriend and I wanted to move. I could have transferred if I wanted to, but again… I felt the life draining out of me. After debating between a few places, we settled on Seattle. So we packed up a Uhaul and made the trek from a tiny town in Arizona, to the great Pacific Northwest. 

We were excited to start this new adventure in a completely different place. We had such high hopes and goals. But, to be honest, we didn’t really think it through. We moved from a place with a very low cost of living, to one of the most expensive places in the country. To give you an idea of what I mean, our rent here is nearly triple what we would pay for a similar place in Arizona. Add the fact that neither of us were working and just living off of my savings and 401K (which I liquidated about 2 months in) and it wasn’t good. We blew through that in about 6 months. 

I still was determined to make it as a blogger and dreaded the day I’d have to go back to working for someone else. But, I was inexperienced and throwing things at the wall just hoping that something would stick. I purchased a couple courses and took some free ones, but nothing seemed to work. I started getting discouraged since I hadn’t made a penny in the 6 months I had been working on it, and things went even further downhill. 

Since we were blowing through our actual cash, I started putting most things on credit. I also didn’t budget myself… like at all. I wasn’t buying crazy things, but we were eating out pretty regularly, and buying random things that we probably didn’t need. My boyfriend went back to work, but again, I was determined to be my own boss and have the freedom that I longed for. 

Even with my boyfriend going back to work, things weren’t working. And a year after we got to Seattle, the inevitable happened. I had to go back to the banking world (and I’m still here) because I had nearly maxed out my credit and blew through all of the funds that I had worked hard to save. I was devastated, but it was necessary. We wouldn’t have been able to make ends meet otherwise.

With that being said, even if you’re not making any major life changes, it’s always good to create an effective budget. It’s eye opening to see where your money is actually going, how much you could be saving, and actually being able to meet your financial goals. 

What is it that you want when it comes to your finances? Do you want to build your savings account? Is buying a house in your future? Maybe you have a lot of credit card debt that you’re looking to eliminate. Whatever it is, be intentional and identify what your financial goals are. Not only will this help you create an effective budget, but it will also be a reminder if you start to slip. You’re working towards an end goal, not just budgeting to budget. Make sure you write your goals down! Just thinking about them is a sure fire way to not only forget them, but lose sight of what you’re doing and fail.

Have you ever heard of the envelope system? Basically what you do is allot yourself a certain amount of money to spend on something (groceries for example), and put the amount in an envelope. If you’re buying groceries, you would then take that envelope with you and would have to make sure you didn’t go over what you have in cash in your envelope. There are plenty of ways that you can manage your budget, but my point is to pick one. Whatever method you think will work best for you and your goals, do it.

Write down every single bill that you have including their minimum payments. Document what other expenses you have every month such as groceries, gas, pet supplies, subscriptions, etc. Sometimes just listing out everything you pay for is eye opening and can show you where you could be saving money every month. Use your transaction history from your credit cards and bank accounts to help you identify everything.

Now is the fun part. After you’ve made that list, hopefully you’ve noticed a few things that you could afford to cut out. Haven’t used that subscription streaming service in months? Unsubscribe. You can always re-subscribe later if you want to watch. You’re never home enough to watch tv, but are paying for a cable package? Get rid of it. Also think about bills that you could potentially reduce. Take a look at your cell phone plan and see if it’s the most cost effective for your needs (when I did this I ended up saving $40 a month). Your cell phone provider and other companies you have a service through aren’t going to blatantly advertise that you could be saving money unless they’re about to lose your business. It doesn’t hurt to review your bills every 6 months or so to make sure you aren’t paying more than you need to be.

This is one of the biggest things that you need to do to create an effective budget. It helps if you have separate categories, particularly when it comes to fixed costs (rent, loans, etc.) vs changing costs (groceries, utilities, etc.). Break down everything that you have to pay for and designate a set amount for each. For your fixed costs, that should be easy since they pretty much stay the same. For the costs that are changing, set realistic budget amounts for each. For example, saying that you’re only going to spend $25 on groceries for the month isn’t a realistic goal (unless maybe you have a farm and garden). You can make it tight, but just make sure that it’s enough. If you don’t spend it all, then great! Whatever is leftover can go to savings or maybe an extra payment to a credit card. If you need help or just want a tracker, you can grab my free budget worksheet here.

I’m pretty positive that every bank has a transaction history that you can easily access through your online banking. However, you can’t rely on that to be 100% up to date at all times. Different merchants take longer to process charges and checks don’t clear until they are cashed by the recipient. This means that in the meantime it is easy to forget and think that you have more money than you actually do. You don’t want to run the risk of getting an overdraft fee (or multiple) for a simple mistake. Not only that, but sometimes when it’s automated you can forget to check it… out of sight out of mind. So, track it the old-fashioned way. You can get a register from your bank, use my free budget worksheet, create your own, or grab an expense tracker online (there are some cute ones). Whatever is going to work the best for you will be fine. 

So carve out some time today, or whenever you have a spare few minutes and follow these steps to create an effective budget. Not only will your bank account thank you, but you’ll feel better and less stressed overall. Having a plan is everything.