Complete Budgeting System I Use

after watching this budgeting video you should never have to watch another budgeting video again [Music] this video is going to break down every single essential component of a budget and we're going to walk through it step by step so let's go ahead and get into it first and foremost what is a budget the definition of a budget is an estimate of income and expenditure for a set period of time since we're at the very beginning of what a budget is and how do we do it I like to break down the budget into four essential components right at the very beginning these four essential components include the fixed section the fun section the buffer section and the debt section so if we take a look here we can see in the fixed section you're going to have things such as rent your gas your food your electricity or utilities your water things to this nature so these are things that are essential you need them to survive these are things in your budget that you have to have now sometimes people have car in this section and and this is going to depend on the area in the United States or the world that you actually live for example if you live in New York City you may not need a car it may not be essential so it won't necessarily go in your fixed component moving on over to the fun section the fun section is going to be things that you have that you enjoy that are beneficial to you but they're not essential so this is going to be things like entertainment internet cable clothing dining out things to that nature now our buffer category is going to be anything extra that we have anything left over just put it in the buffer and that's going to actually be at the very end and the other category that we have here is debt this is going to be our personal loans credit cards student loans Etc this is our debt category now however sometimes you know you have your mortgage that's a day that however that's going to be in your essential component either one is fine it doesn't really matter at this step we know you need a place to live though that's why I like to put it in that fixed category because if you don't pay that you're going to be homeless right so your first step is to go ahead and fill in these four categories I want to let you know that all four steps are going to be downloadable from a free pdf in my description or comment section however you can definitely just use a notepad and a pencil and write these things down you don't have to download this it's just available for free if you'd like to follow along after you have that completely filled out we're going to move on the next section we're going to move on to is writing down our complete income and our complete total expenses as you can see here you're going to list all of your income every single penny that you know you're going to bring in you're going to list it here and then over on the other side where going to put those total expenses and we're going to place that number there on that side now the goal is for this to be less than your income for this video I'm just putting that 3999 because this is the goal here now if you find that your income is less than your expenses this is why step one was very important and beneficial because you're able to see what you actually need what is fixed you know you can't live without you're going to see what is a buffer if you have any you're going to be able to see that fun category which are things you can cut out you can cut back on cable you can cut back on subscriptions you can cut back on dining out you can cut back on entertainment so this section this section are really things you can totally diminish so that's why step one is really beneficial hopefully everybody here watching this this video is going to have it right at your income or below your income another possibility is that you have a no buffer and no fun so you have nothing in your fun category nothing in your buffer category and all you have is your debt and your fixed Essentials I have been there so I definitely understand this so there are ways that you can cut back on your Essentials using less electricity going to discounted grocery stores meal planning so many different ways that is for a whole nother video so this is going to be essential cutting back on expenses in order to meet that budget of income all right now that we have step two completely out of the way we're going to go ahead and move into step three which is going to be listing all of the due dates that you have and the complete amount due so it's going to look something like this you're going to have your car due on the fifth you're going to have your electricity due on the 15th and then on the other side you're going to be putting a thousand dollars directly across you're going to be putting 75 directly across so the next step is to completely fill this out so you have an organized list of all your due dates and all the amount due after this I personally like to break this down one more step now this is going to be to break it down in a bi-weekly category so a lot of you probably get paid bi-weekly that's pretty much the standard in the United States I don't know about the rest of the world but in the US bi-weekly pay is pretty much the standard however some companies do pay once a month you know you may get paid from YouTube and you only get paid once a month so this is going to depend however I personally even if you get paid once a month I like to break this down and Buy weekly categories it keeps you very organized it keeps you ensuring all of your stuff in is getting paid right on time which is very important and so let's take a look at this so right here on the first side you're going to list your first pay period which is going to be pretty much somewhere in between the 1st through the 15th of the month or the first to the 14th and then on the other side you're going to list that second pay period in the month which is the 15th through the 31st so you're going to put your two pay dates there at the top so you're going to be doing this monthly you can go through the entire year and do it for the whole year you can do it month by month however you want to do it but at those two spots at the top you're going to be putting your two paychecks per month so for example the month of April okay I'm getting paid on April the 7th and I'm getting paid two weeks later on April the 28th you know whatever's 14 days later and then from there you're going to go back to step number three and you're going to look at all your due dates and your amount due you're going to place each due date item in the correct category that it goes so if you have a due date here that is the 14th you're going to put it in the first category and if you have your electricity due on the 28th you're going to put it on this second category okay so that's why you're going to break it down the first through the 14th and the 15th through the 31st sometimes you are going to find that let's say