It all started.......
Frequently Asked Questions
Step 1: Determine your financial goals
Take the time to understand the goals you would like to accomplish with your money. It could be:
Saving $5,000 per year for vacation
Saving $25,000 for your child’s education
Paying off $10,000 in credit card debt
Saving $20,000 per year in your retirement account
When creating your goals, make sure they are SMART: Specific, Measurable, Attainable, Realistic, and Timely.
Step 2: Determine your current spending habits
Normally you manually track your expenses for a month but with technology, you can speed up this process.
Most financial institutions allow for the download of your transactional history for the last year. Go to all of your financial institutions (i.e., checking accounts, savings accounts - if spending from those accounts, and credit cards) and download all of your transactions from the previous month in excel.
Next, combine all files into one using the most important categories (make sure they are in the right order for whichever financial institution you want to use as the main document):
Transaction Date
Transaction Name
Transaction Amount
Transaction Category
Financial institutions provide categories to match your transaction. Go through each of the categories to ensure they are correct or assign your own. Financial institutions’ categories are not created equal so make sure they match.
The last step is to create a pivot chart to see your spending consolidated into your categories.
Need assistance with excel, check out this cheat sheet!
Step 3: Analyze your spending
Now it is time to get real with yourself.
Subtract the total amount of spending from your monthly income. If the Difference is:
Zero - your income equals your expenses
Positive - you have more income than expenses
Negative - you have more expenses than income
If you are in the negative or at zero but don’t have any room for your goals, you need to analyze your spending and see what you can eliminate to get yourself into a positive state.
Maybe your spending for groceries was significantly higher than normal that month and you can reduce the amount. You had a little too much fun at happy hours or on the weekend and can cut that down.
Don’t forget about those one-time expenses you may pay for that don’t show up for the month:
Car Insurance
Specialty credit card fees
Yearly memberships (i.e., Beachbody, xBox, Costco/Sam’s Club)
Renters/Home Owner's Insurance
Tax Payments
You should also account for these items in your monthly budget so you are saving money towards the payment.
Step 4: Budget One Paycheck at a Time
The best thing about budgeting One Paycheck at a Time is that:
You know how much you can spend for the expense category during the pay period
The money is always available for you to make your purchases
To accomplish this, you must split your expense by your pay frequency.
For example, you are paid weekly and your budget for your groceries is $100 for the month. You would divide your expenses by 4 (number of weeks in a month) which comes out to $25 per pay.
Let’s use car insurance as an example. You pay $300 every six months for your car insurance and you are paid semi-monthly. You would divide the expense by 12 (number of weeks semi-monthly weeks in 6 months) which comes out to $24 per pay. This amount will continue to rollover within your budget until you are ready to make the payment.
Yes, we do:
Video #1: Adding Income - https://youtu.be/EaTWTNa1D70 (Time: 2:52)
Video #2: Adding Additional Income - https://youtu.be/tyHUk146or4 (Time: 1:23)
Video #3: Creating Your Budget - https://youtu.be/9_Uajm13yE8 (Time: 4:33)
Video #4: Paycheck Review - https://youtu.be/1l8bkA5RfwA (Time 2:12)
Video #5: Adding Goals - https://youtu.be/9clMsnuAgi4 (Time: 1:54)
Video #6: Adding Financial Institutions - https://youtu.be/TccKpBcUatA (Time: 3:12)
Video #7: Adding Manual Transactions - https://youtu.be/EPmtOrc7c1s (Time: 2:13)
Video #8: Transaction Review - https://youtu.be/pN0HVmNg9Jo (Time: 6:53)
Please note at the 3:50 mark, we discuss clearing overage in your budget. An important wasn’t noted that you should be aware of. When clearing balance once a rollover has occurred within the paycheck budget, you must take the rollover balance into account when adjusting your balance. If a rollover did not occur, you can change the balance to the value you would like.
Total Viewing Time: 23:12 minutes