Budgeting for beginners and those who wonder where their money goes

Budgeting is a word that always made the hairs on my neck stand up. For years, I avoided it like the plague. I thought if I had money, I could spend it and that was that. The rest could go on a credit card. I could not have been more wrong. 

Years later, I sat down and decided that having a savings account with $500 was not going to be enough. And my checking account was even lower. I knew how much money I earned every month, but somehow al most all of it seemed to be gone by about the 25th of each month. Where was it going? I had no clue.

First I decided to put one of my 3 monthly checks into my savings account each time I got paid. It wasn't a lot, but it made a difference and built up my savings past its usual molehill status. That worked for a while and I felt a bit more secure because I had a substantial (that's a strong word) savings. But I still didn't know where the rest of my money was going. I never spent anything out of my savings, so that was ok, but my checking account was languishing every month. The next step was very sobering. I faced head on, that "B" word. I sat down with my excel sheet and listed every expense for the month. Some were easy because they are fixed. (rent, health insurance, internet phone) Some were a bit trickier since they seemed to vary more. (utilities, prescriptions, doctor visits, groceries, gas in the car). Now was the daunting task of figuring out how much money was coming in versus how much went out.

It took me several tries to get it right. The method that seemed to work best for me was this:
On an excel sheet I listed the expenses I would have for a specific month. Most were predictable like the aforementioned items, but some were specific to that month like car registration and taxes. I had to account for those things for that month only and therefore budget "around" that. I also had to accept that I may be spending more that month than in a typical month without those expenses. 
After listing the expenses, I made a "projected" column--that is what I would guess I would spend or what I wanted to budget for that item. The next column was the "actual" list where I would fill in what I really spent. Sometimes the "actual" spending was over my limit and sometimes under. I could see how much I was spending in relation to how much I was bringing in. I was actually living within my means, but I could see where most of my money was going and how I could make some cuts and where I needed to allow for more. The second month went better than the first. Now that I'm on the third month, I expect to get better at projecting what each expense will be. I'm more careful with the places where my money seems to fly away (eating out, groceries...hmm...FOOD). It's nice to know exactly how I'm spending my money and what I really need to spend on each item. For instance, I thought I was spending much more on gas in the car than I really was. I actually spent only about 50% of what I budgeted. YAY! 

I'm going to keep trying to be more disciplined with my spending and see if I can reach my financial goals much sooner than I would have before I started budgeting. It's a process to be sure, but my ultimate goal is to be debt free and have a healthy savings and emergency fund. (not to mention enough to pay my bills and live comfortably). 

I don't pretend to be a financial guru (I hate numbers!) but I am attempting to take control of my finances. We all know I like to be in control, have everything in order, in its place, and neat and tidy. 

If I can do this, anyone can do this. Give it a try! Remember....baby steps.