Budgeting might sound complex, but it's really not once you take the leap and actually get started. Plus, the payoff is worth the small learning curve.
Creating a monthly budget can put your financial woes at ease because you know exactly where your money is going and how much money you're bringing in monthly. Taking control of your finances can seem daunting, but it's worth it when you're not stressed about your ability to pay your bills on time, while still meeting your personal financial goals.
1.Set A Reminder
First things first, pick a day out of the month to prioritize budgeting and set a monthly reminder on your calendar. When life gets busy, the last thing on your mind will be a budget.
2.Set Personal Financial Goals For Your Budget
As a beginner, it's important to set personal financial goals before creating a budget. Ask yourself, why are you creating a budget? Solidify the long-term financial goals you are aiming to reach, so you can create a personalized plan of attack to conquer your goals. Everybody has a reason for wanting to clean up their spending habits. It's up to you to determine what your budgeting end goal is. Are you budgeting to:
- Save for a car purchase?
- Create or build an emergency fund?
- Pay off current debt?
- Afford a pricey vacation?
Sit down and write down your purpose for budgeting and the exact goals you are hoping to achieve.
3.Pick A Budgeting Method
50/30/20 Rule:
The 50/30/20 method of budgeting was popularized by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan. This rule offers a simplistic budgeting plan to help others reach their financial goals. The rule recommends spending up to 50% of your after-tax income on necessities and obligations, essentially fixed expenses. Then 20% of the remaining half should be allocated to savings and debt repayment, and the last 30% of the remaining half should be allocated to anything else that you want.
Zero-Based Budget:
Zero-based budgeting is a method of justifying all expenses for the period. Basically, the income minus the outgo has to equal zero for the month. After covering your expenses for the month, if you have $300 left over, then you have to allocate it towards something. For example, allocate the money towards paying off debt, an emergency fund, etc. Studies show this method of budgeting helps people pay off 19% more debt and save 18% more money.
4.Choose A Tool To Create Your Budget
Determine what tool you want to use to create and track your budget. Some people enjoy the old-fashioned pen and paper method, but in this day and age we have many technological options as well. For those who know their way around Excel, you can make a budget using an Excel spreadsheet. If you choose to create a budget, then follow these simple steps:
- Record your sources of income
- Record your monthly expenses
- Divide the expenses into fixed (same expense every month) and variable expenses (changes month to month)
- Total your monthly expenses and monthly income to understand your monthly cash flow
If manually creating a budget isn't convenient for you, then there are many free budgeting tools available to give you a hand. Mint is one of the leading free budgeting apps that automatically tracks your expenses and incoming money by syncing to your bank accounts. Mint helps you to create a budget and set goals with ease.
If you aren't interested in downloading an app or manually creating a budget, then Budgetpulse could be the perfect solution for you. Budgetpulse is a free personal finance software that organizes your cash flow, expenses, bank accounts and allows you to set financial goals.
5.Analyze And Assess Your Budget
Setting financial goals and making a budget is great, but it's important to analyze and assess your budget monthly by creating a plan to meet your goals. How much money do you need to save each month to reach your goal and how will it potentially take? If you're saving towards a relaxing vacation on the beach and you estimate that you need to save $1500, then figure out how much money you will save per month to reach your goal. If this requires you to cut back on expenses, then assess your budget for opportunities to cut-back on expenses or increase your income.
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Skylar sees things differently. At the time, she was shooting content on her iPhone. Temi came into the picture with a new perspective, an understanding of tech, and, eventually, a camera. “He doesn't give himself enough credit,” Skylar says. “He wasn't just my tripod. He wasn't just standing behind the camera and going ‘click.’ He was giving advice. He was giving me insight to how I could look at things from a different perspective. And I was like, 'Oh, he’s an artist.' I think it was maybe a heartbeat of that kind of energy of like, ‘Baby, can you take this picture?’ And it turned so quickly into, we're partners. We can work together in a way where we're advancing each other's creative thinking.”
The pair often says they’re two sides of the same coin. Skylar is an Aquarius. She attended art school, paints, and loves poetry. She’s more than happy to let the couple’s management firm and agency, Kensington Grey, handle their admin work. And, she loves to sleep in. Temi, on the other hand, wakes up early. He’s a Virgo. He loves a to-do list and regularly checks in on the couple’s brand partnerships spreadsheet to make sure everything is on track.
Because his storytelling was steeped in his love of technology, he didn’t always think of himself as a creative person. “Where I [am] the dreamer who wants to pluck things out of the sky and spend all day with my head in the clouds, Temi [is] so good at grounding me and helping me figure out how to make things make sense on paper. We just work together in such a complimentary way,” Skylar says.
It’s been more than six years since Brooklyn-based couple Temi and Skylar started dating, and nearly four since they cemented their working relationship. On TikTok and Instagram, the couple’s travel, fashion, and home content regularly rack up hundreds of thousands of views. They’ve worked with brands such as Coach, Aesop, Away, and Liquid IV, bringing their vibrant perspectives to every campaign they execute. Still, nearly two years since both Temi and Skylar committed to full-time content creation and creative directing, the couple says their romantic connection remains their priority.
“We told each other we would much rather go back to full-time jobs and preserve our relationship than to be full-time freelancers, barely getting a night's rest [and] barely kissing each other because we're so busy shooting,” Skylar says.
Working from home can make it hard to separate work from personal life for any entrepreneur. It can be even more challenging when your business partner is also your lover. Temi and Skylar had already used couples therapy as a tool to help them effectively communicate with one another. When they ran into challenges while working together, their therapist helped them set physical boundaries to help combat the issues.
"We told each other we would much rather go back to full-time jobs and preserve our relationship than to be full-time freelancers, barely getting a night's rest [and] barely kissing each other because we're so busy shooting."
“It actually took us doing very specific physical things to create boundaries between work and play in our relationship,” Skylar says. “So, for instance, we will only have conversations about work when we're out of bed or we're at the table or in the office. Initially, when we started, we had to light a candle to say that, 'Okay, this is a space where we're connecting, we’re not talking about work.' We needed really hard boundaries at the top. And then it became a little bit more organic.”
The boundaries have been crucial to implement, especially because the couple began working together so naturally. When the pair first met, Skylar was NY-based a social strategist for BuzzFeed and was using content creation to drive business to her lingerie company. She was shooting her own content. Temi was working for Microsoft in D.C. He’d recently traded in his DJing equipment for a camera. “I've always loved taking pictures,” he says. “Even when I was a kid, my African mother would wake me up at 3:00 a.m. [during a] party, and be like, 'Come take the family picture.'”
Growing up, Temi says he watched his parents support each other and be the true definition of partners. He knew he wanted the same for his own relationship. But, the couple also wanted to make sure they were being financially responsible. The pair didn’t quit their traditional jobs until they’d saved up two years' worth of their cost of living. And, Temi received his Master of Business Administration from New York University with the knowledge that it could either help him advance in his corporate career or be applicable to his business with Skylar.
Temi and SkylarCj Hart @hartbreakToday, they say their working relationship is more of a “quiet dance.” They still implement some of the boundaries they learned in therapy, but they also lean into their natural strengths and deep love for one another. When we speak, Temi has planned a date for the couple to see Princess Mononoke in 4K IMAX and added it to their Notion so they can factor it into their busy schedules. “I fully plan to date for the rest of my life,” he says.
Skylar says the couple doesn’t just wait for date nights to check in with one another, though. This often happens in the mornings, after Temi has made her peppermint tea and poured himself a cup of coffee. When they ask each other how they slept, she says, it’s not just a “nicety.” It’s a genuine question meant to foster connection.
“A lot of it happens during the day in the midst of work. We'll stop and we'll hug. Or we’ll slow dance in the kitchen,” she says. “Sometimes it's hard to set a whole date night when you have 7,000 things going on. So, we must grasp these moments and check in when we can. And I think it's become so organic to us that I actually didn't even realize how often we do it. But all day long, we're like, 'Are you good? I felt like your energy shifted,' because we're best friends, we just know. We just feel it happen.”
What’s better than being in love? Building wealth while doing it. Watch Making Cents here for real stories of couples who make money moves together.
Featured image by Cj Hart @hartbreak