Money and finances can be a bit of a taboo conversation topic, but I’m here to break down those barriers with a new weekly series, Money Mondays. From the basics of budgeting, to starting a savings, to paying off loans, to buying a car, to the value of a dollar and beyond, I’ll be sharing tips and tricks from my own personal experience to help you improve your finances in an easy, realistic way.

As I’ve gotten older, finances and the value of a dollar have become more and more important to me and something I focus quite a bit of attention on. I paid off 2 of many college loans before the age of 30, I have a credit score of 837, I have made over $750 in supplemental income selling items on Poshmark, I just recently bought a new Jeep [see tips for buying a new car here], and I have a savings account growing daily with minimal effort on my end for future investments and life down the road. My financial situation most certainly didn’t always look like this and I used to throw around money like it was candy…like bartending in college and blowing every single dollar I made on clothes and going out [ugh, insert face palm emjoi here].

So as the first post in this Money Mondays series, we’re starting with the very basics of starting a monthly budget. Grab your coffee - or wine depending on when you’re reading this - and let’s get to budgeting!

STEP 1: CREATE A SPREADSHEET

The first and most important step in starting a monthly budget is to get everything organized so you can easily reference it and track things. Whether its in the notes on your phone or in a spreadsheet, keeping things organized will be key to success.

When I first started really focusing on my finances, I found that creating a spreadsheet with everything included was most helpful. I could see line by line what my money was going to, what areas I was spending to much on, and how much of my monthly income was going to fixed expenses like rent and loan payments.

Now you can make this spreadsheet as fancy or as simple as you’d like, whatever works best for you! If color-coding and drop-down categories helps you visually see everything better, go that route. If just getting it all onto the spreadsheet and having the Excel formulas do the math works for you, then go that route. This may take some time and tweaks to see what is most effective for you personally but it’s best to start somewhere.

STEP 2: TRACK MONTHLY INCOME

For step 2, you are going to want to track your monthly income. If you have a job with a salary this will be easy to track and calculate but if you are freelance or self-employed and your income varies month to month, you will have to do some backtracking to try and find an average monthly income. Since the self-employed route is not my specialty, TheEvergirl has a great article on Budgeting for the Self-Employed you can check out.

I like to keep track of my total monthly income [net income, not gross], the frequency I’m paid [bi-weekly], and what my income is each pay period. With bills all having different due dates, this helps me see when the money is coming in and when I’m able to pay bills making sure they are paid on time.

Personally, I only track my salaried income and do not track any commission from TLSW or Poshmark sales as monthly income because I put all of that directly into my savings no matter the amount. Again, do what works best for you!

STEP 3: TRACK MONTHLY EXPENSES

Next, it’s time to figure out what exactly you are spending each month on both fixed and variable expenses. Fixed expenses are costs that do not fluctuate from month to month. Things like rent, mortgage, car payments, cable/internet, and loans would fall under fixed expenses. Variable expenses on the other hand do vary from month to month and include things like gas, groceries, entertainment and shopping.

When I’m tracking and noting fixed expenses, I like to also note their due dates. Again, this helps me figure out exactly when I can pay bills on time [aka early] based on the frequency of my income. For variable expenses, it is best to look back at the past 6 months to get an average of what you spend on these items. It can be eye opening for sure as you start calculating how much you spend on coffee each month or buying lunch instead of bringing, but remember this is the starting point! We’ll continue to edit and tweak things to make the best use of your monthly income.

At this step, it is also important to take inventory on any credit card or loan balances. You’ll usually have a monthly minimum to pay, so use that number but every good budgeter knows that it’s important to overpay those minimums to help knock down the total and interest you’re paying…but we’ll get into that more later in this Money Mondays series.

STEP 4: DO THE MATH

After you’ve determined your monthly income and noted all of your monthly fixed and variable expenses, it’s time to do the math. This may seem pretty obvious but you’ll take your total monthly income and subtract your total monthly expenses [fixed and variable] to see where you stand. You’ll land in one of three categories: surplus, break-even or deficit.

If you fall in the surplus category, high fives to you! This means that your expenses are less than your income, meaning you could potentially be saving more or paying off loans/car payments more. If you fall in the break-even category - meaning your income and expenses are the same - you still get a high five but you may want to do some re-evaluating on the expense side. Lastly, if you fall into the deficit category…you have some work to do. You really need to evaluate your monthly expenses to see where savings can be made and what variable expenses can be cut [bye bye, Spotify premium]. You may also want to consider a side hustle for additional income.

Now if you are just starting to focus attention on your monthly budget, this step might be a little shocking or eye opening…at least it was for me! This step is important though and you want to make sure all of those numbers are accurate. It’s time to be honest with yourself on your financial state. This is the starting point and there are plenty of ways to improve that, but we need to see the reality of where we are at this current point in time.

STEP 5: EVALUATE AND RE-EVALUATE

So you’ve figured out your monthly income and expenses, and have pretty accurate representation on where you are from a financial standpoint. I’ll be going more in-depth on this evaluate and re-evaluate step in a later post in this series but this is such an important step that you don’t want to overlook.

Once you have everything outlined in your spreadsheet, it’s time to really go through things line by line and evaluate. Are your needs, or fixed expenses, too high? Are your wants and variable expenses too high? Has your savings account not seen any love in months or years? Are there any areas in which you can find savings? Are there things you haven’t been budgeting for in the past? This can also be another tough step but it is time to be honest with yourself. Like yes, no ads on Spotify are great but can that $9.99 a month for premium be going toward something more financially smart?

STEP 6: CHECK IN FREQUENTLY

No matter if you are a seasoned vet or just starting out, checking in frequently with your finances is so incredibly important. Whether it is weekly, monthly or maybe even every few days, find a system that works for you. If you are just starting out, continue to evaluate and re-evaluate your finances until you get them fine tuned. Make note if you are hitting your goals of say adding $500 to your savings each month or spending under $25 on coffee. Can you automate any of your bills and are you prioritizing needs vs wants? It certainly is not easy but I promise you will thank yourself for being financially prudent down the road!

And there you have it, the basics of starting a monthly budget! I hope y’all are as excited for this new Money Mondays series as I am. Do you have any monthly budgeting tips or ideas for topics you’d like covered in the series? Share below in the comments!