hey there Tiffany Thomas with wealthy Tiffany dot com and in today's video we're
gonna be talking all about budgeting so get really excited I know everyone loves
to talk about budgeting okay maybe they don't but I'm gonna make this video as
painless as possible I'm going to be sharing my step-by-step strategy on
exactly how I budget to help make it help make it easier for you guys to
budget yourselves and I know that budgeting is so helpful because I have
been able to travel all around the world I've traveled to Paris to Italy Israel
Guatemala Hawaii and a ton of other places plus I've been able to invest in
four different properties that I manage myself and also I am able to sleep at
night because I'm not worried about if I'm going to be able to pay my bills or
not so I know that budgeting is super helpful and I want to share these ideas
with you guys to help make budgeting easier for you so that you can actually
accomplish goals that you want to be accomplishing instead of just asking
yourself where did help my money go this month so give this video a like and we
are going to dive right in in order to create a budget I created a spreadsheet
and you could of course do this on paper if you want to I just prefer to use a
spreadsheet so I created this spreadsheet and the top of the
spreadsheet is my income section and the first column is going to be the category
of income that I am receiving so that could be my rental income and when I had
a nine-to-five I had my paycheck listed on there and I would list the net income
of my paycheck not the gross income the net income is the amount that you were
actually receiving on your paycheck so you could list of that out and then
maybe you want to list your income that you're getting from interest maybe you
have some money in a savings or in a CD and so if there's anything like that you
could put that as a income line item you could also add in any side hustles that
you may have maybe you drive for uber so you could put that amount in and that
first column is the category and then the next column is
going to be your monthly expected amount so you would have over $200 or whatever
it might be and once you have all of those numbers
listed and this is just the expected amount so this isn't the actual amount
and when you are entering your income amounts make sure and err on the side of
caution you don't want to be putting in amounts that you are not really going to
be receiving H month you would rather put in the minimum amount that you would
be receiving rather than the maximum amount that you could receive this will
help you have a more realistic budget and that way if you do have extra income
then you feel great about it instead of having a less income and you're thinking
oh man what am I going to do now and then the next column that I have is the
yearly expected amount so all I did was take that first column the expected
monthly amount and multiply that by 12 so I just have a formula in my
spreadsheet that does that for me just so I can get a better understanding of
the yearly totals that I have and then once that is completed then I made
another column for the actual total and this is going to be the yearly total so
to get the amount of your actual yearly total I have columns after that for each
of the individual months so January through December and we're going to be
pulling in your actual income amounts into the spreadsheet and that way you
have a breakdown for each month how much you earned but then you also have a
column of the total amount that you've earned so far in the year
so you can compare that to your monthly expected amount and your yearly expected
amount and see if you are on track or not and make adjustments which we'll
talk about a little bit later and then once you have all of your income
categories listed then I created another row at the bottom of all of the income
amounts and put in my total income so that I can have a clear picture on the
exact amount that I have coming in and once the income section is complete
we're going to move to the expense section of the
budget and this is going to be all of your expenses make sense right and we're
going to do the same type of columns that we did for the income so we're
going to list out the category for each expense in the first column and then the
next column is going to be our monthly expected amount for those expenses and
then the next column is going to be the yearly expected amount which we're just
going to put in the formula and multiply that first column by 12 to get our
annual expenses and when you are listing out all of your expense amounts you want
to do the flip side of what we did with our income so with our income we put in
the minimum possible that we could be making and with the expenses we want to
put in the maximum expense that we could be paying that way when we pay less for
our expense we are going to be happy about that
instead of being sad when we have to pay more and then we will have our actual
annual expenses in the next column and then we'll have all of those months
January through December and then once all of those are listed at the bottom
you're going to have another line another row for the total expense amount
that you have and the way that I like to enter in my expenses is by creating a
row at the top of the expense section for something that I'm working too
worried so this is paying myself first I'm sure you guys have heard of us not
to pay yourself last but to pay yourself first and this is how I help myself do
that I actually add this into my budget so I create a line-item and whatever
goal I'm working on right then that's what goes there so if I'm working
towards just funding an emergency fund then I put in that line item and I say
okay $200 toward emergency fund and then once I have my full emergency fund
funded then I can pull that out and I can put in another goal that I'm working
toward maybe I want to start funding some investment accounts so I can put
that line item in there or maybe I want to take another trip so I want to save
up for that so I can put that line item in there whatever you're
working toward but that way you're paying yourself first and it makes your
budget really fun because you can see that you're actually working towards
something you want to be working toward you are accomplishing your goals so put
that line item first and you can have more than one category if you want to I
just like to focus on one thing at a time
but that's what I like to put in first and then I like to list the rest of my
fixed expenses so these are amounts that are not going to change month to month
for example if you have a cell phone bill then that is probably not going to
change month to month you probably pay the same amount every month so you can
put that in and then maybe you have a mortgage that you're paying so you can
list mortgage as your next line item and put that amount in so just go through
and think about all of the different expenses that don't change month to
month and list those first because it's going to make it easier to get your
budget going because those are items that you already know you're already are
expecting to pay those items you know the exact amount and then once you have
all of those the fixed expenses listed you'll want to enter in your variable
expenses so this is an expense that would change from month to month this
could be things like groceries maybe you're going to stock up on some certain
items one month so your grocery will the grocery bill will be higher that month
and then it'll be lower next month so it changes month to month and this could be
things like eating out or maybe going to a movie or a play some fun stuff that
you like to go and do so think about all the variable expenses that you have and
you can look back at previous credit card statements or your debit card
statements and see what expenses you have had in the past to give you a
better idea on what your expenses are so that you don't forget anything and one
thing that I want to mention is don't forget about expenses that you only have
once a year or maybe even twice a year this could be maybe your car insurance
maybe you pay that every six months or maybe you have some subscriptions
Amazon prey anyone I don't know so don't forget those one-time expenses that
happen just once a year make sure and list those out and when
you are listing those expenses you can just take that total yearly amount that
you pay and divide that by 12 so that you have that first column filled out
with your monthly amount that you would be paying even though you're only paying
it once a year but this way it's in your budget and you are expecting to pay that
bill when you actually have to pay it once you have all of those expenses
listed then do another row at the bottom of your expense section and total up all
of your expenses so we can see exactly the total amount we are spending each
month and over the whole year and then once you have your expense section done
I want you to create another row at the bottom and this one you're going to take
your total income that you have received - out your total expenses how much
you've spent so that we can see your net income we want to make sure that that
amount is positive or 0 we don't want it to be in the negative and if it's in the
negative we need to make some changes right away and if this is making sense
so far comment making sense so I know that you guys are following along
alright now here comes the fun part once the spud she is set up we are going to
enter in our actual expenses and I want to share with you how I actually do this
because it has made my life so much easier by doing it this way and of
course you don't have to use this method but I want to share it with you guys so
most of the time people will just manually input their expenses for the
month and that's really time-consuming so the way I like to do it I actually
have all of my financial institutions hooked to mint.com and personal capital
com you can just pick one they're both very similar but they are free websites
where they'll show you a financial picture of all of your finances so you
can hook all of your financial accounts to one of these websites if you have a
mortgage payment that you are paying or if you have a credit card you are using
or or savings or a 401k you can link all of
these accounts into personal capital comm and that way you can have a
complete snapshot of everything you're spending your money on and they have
this great function in there where you can export all of these transactions
into a spreadsheet yes you guys so this is how I do it
I log in to my account and I will update my categories that they have listed in
there for each of my expenses so they'll do a default category like mortgage and
I will update that category to match exactly what I have put in my
spreadsheet so if I called my mortgage mortgage payment in my spreadsheet then
I will log into a personal capital and update that category to show mortgage
payment so it's the exact same category and as you do this over time it becomes
easier and easier because you can set it to a default that you want it to show so
when that expense comes in next month it will automatically categorize it to what
you have told it to categorize it to hopefully that makes sense but it's I
mean it's a little work to get it set up but once it good once it's going it
makes your budgets so much easier to update so once I have updated those
categories in my personal capital account then I can export all of those
into a spreadsheet and then I can put that into my budget so I have a separate
tab for each month so I have that yearly overview tab at the very beginning this
is our budget that we have set up with all of our our overview for the whole
year and then the next tab is January and then the next tab is February all
the way to December and when I export those transactions I just put in the
transactions into each month so it exports with the date so I just take all
of January expenses and put it into the January tab and then I've created a
formula in there that will automatically show all of my expenses in that overview
tab so all of my expenses I have in that January
let's say I have a cellphone a mortgage payment and a car payment
those are automatically going to show in my yearly overview tab in that January
column because I've created that formula and so it pulls from the January tab
into the yearly overview tab so I'm not typing in all of my expenses I am just
exporting from you can use either mint.com or personal capital comm and
export all of those transactions into your Sun sheet and I know a lot of
people just maybe want to use personal capital com they like the electronic
version of things but I like having my own spreadsheet and this way I can
double-check everything and make sure I entered all of those categories
correctly at just a quick glance so I like having a spreadsheet along with
using the technology side of things so I will update this every month and if you
are just getting started I would recommend doing this weekly so that you
don't get behind or fill overwhelmed with updating your budget but I would
actually set a certain time each week to do that and I would have it be with
something else that you do every week so it could be maybe on your lunch break
every Monday you set in your phone on your calendar and reminder to update
your budget every Monday at noon whatever time you go to lunch or maybe
if you go to church every Sunday then you set an alarm 30 minutes after
church I'm going to update my budget find a specific time that works for you
and do this weekly and once you become more familiar with your finances then
you can scale back and do it monthly instead of every week and feel
comfortable with that and if you don't want to use the technology side of
things you don't have to you can just log into your checking and savings
account your credit card account whatever it is those bills or maybe you
have a folder that you keep in your email once you pay every bill so you can
go back to those and just look at that and say okay I paid this amount for this
or I put this amount on my credit card for groceries whatever it was but just
find a system that works for you once you start to update your budget every
week you can get a clearer picture of your entire financial life
simile I had noticed that I was spending a lot more on clothes than I really
wanted to be spending and once you know I started to see that in my budget I
thought ah you know buying all these clothes isn't really what I value it's
not one of my priorities I would rather buy another property and
I took this money that I was allocating toward clothes and I put it towards
saving for a down payment on another property so if I didn't have my budget I
don't think I would have realized exactly how much I was really spending
on clothing once you have this picture you can start to say okay my spending
habits aren't really aligning with my priorities or what I really value so I
need to start making some changes and you can start adjusting over time and
really start working toward financial goals that you want to be achieving and
have a better picture of where you're at with your money
so hopefully this was helpful in being able to set up a budget for yourself or
maybe just improve on your budget and comment below and tell me where you're
at with your budgeting do you already have a great budget in place or have you
not started or maybe you have another tactic that you use so sure in the
comments I would love to hear that and if you found this video helpful please
hit the like button and share it with someone else who would like to create a
budget and please hit the subscribe button to subscribe to my youtube
channels so we can get this content out to more people don't forget to hit the
bell to get notified on when I post new videos thanks so much for watching and
I'll see you in the next video