Budgeting for Beginners - How to Make a Budget From Scratch 2021

Summary

In this video, Justine from Debt Free Millennials shares essential budgeting tips for beginners, emphasizing how she paid off $35,000 in student loans on a $37,000 salary in just over two years. She outlines the budgeting process, starting with listing monthly income, debts, and fixed expenses, followed by discretionary spending and future savings. Justine highlights the importance of creating a zero-based budget, ensuring every dollar is accounted for to prevent overspending. She encourages viewers to use her free budget toolkit for tracking income and expenses effectively.

Takeaways

• 😀 Budgeting is a crucial tool for managing debt, demonstrated by the speaker's experience in paying off $35,000 in student loans on a $37,000 salary.
• 📅 Start by identifying your monthly income, which can be found through bank statements or averaging past paychecks.
• 💳 List all debts, including student loans, credit card debt, and personal loans, along with their minimum payments.
• 🏠 Determine fixed expenses like rent, utilities, and groceries by reviewing past statements or estimating based on your knowledge.
• 🍽️ Fun expenses, such as dining out and subscriptions, should also be tracked separately from fixed expenses.
• 🔍 Ensure your total expenses (debt, fixed, and fun) are less than your income to avoid overspending.
• 🌟 Include future savings goals in your budget, such as saving for a vacation or a new car.
• 🛡️ Create a 'fudge' category for unexpected expenses to act as a buffer in your budget.
• 📝 Aim for a zero-based budget where your income minus expenses equals zero, helping to allocate every dollar purposefully.
• 📊 Utilize tools like spreadsheets or budget toolkits to track income and expenses effectively.

Q & A

What is the primary tool mentioned for paying off student loan debt?

The primary tool mentioned is budgeting.

How much student loan debt did the speaker pay off, and in what time frame?

The speaker paid off $35,000 in student loan debt in just under two and a half years.

What is the first step in creating a budget according to the speaker?

The first step is to list out your monthly income.

How can someone determine their monthly income if they are unsure?

They can check their bank account statements or calculate the average of their last three months of pay.

What types of debts should be listed in the budget?

Debts like student loans, credit card debt, personal loans, and car loans should be listed.

What are fixed expenses, and how should they be estimated?

Fixed expenses include rent, food, utilities, and insurance, and can be estimated by reviewing past bank or credit card statements to find an average.

What does the 'fun' category in the budget include?

The 'fun' category includes expenses for restaurants, clothing shopping, and subscriptions like Netflix or Spotify.

What is the purpose of the 'fudge' category in the budget?

The 'fudge' category acts as a buffer for overspending in other areas or unexpected expenses.

What is a zero-based budget, and why is it important?

A zero-based budget means that your income minus expenses equals zero, ensuring every dollar is allocated and reducing the chances of overspending.

What resources does the speaker offer for budgeting?

The speaker offers a Google spreadsheet for budgeting, along with a budget toolkit tutorial linked in the description.