In June 2011, I was completely maxed out.
With only $100 in my bank account and maybe a little more than that left open on my credit card, years of swiping for the lifestyle I could never afford had finally caught up with me.
And while I was too scared and ashamed to tell my family and friends, I knew I had to talk to somebody about it – so, I started an anonymous blog.
How I came up with the name Blonde on a Budget still baffles me, because I had never budgeted before in my life.
To be honest I can’t say that I knew my blog would actually have anything to do with writing and sticking to a monthly budget.
I just knew I had to start taking control of my finances, and for me, that meant writing a blog that would help keep me accountable.
It didn’t take long for me to realize I needed to learn how to budget, though.
With money coming in and going out faster than I could realize, I knew I was making strikes in paying down my debt but I had no sense of where the rest of my money was going.
So like any good writer, I decided to do some research.
I started reading book after book written by authors I now consider heroes, post after post written by personal finance bloggers who later brought me into their community, and news story after news story.
There was no shortage of free information online but the one piece of advice I took away from it all came from a book called Debt-Free Forever by Gail Vaz-Oxlade.
Start Tracking Your Spending
Before I even pretended to know how to budget, I started tracking my spending. From the $2.97 I spent (too often) at Starbucks, to the $500 payments I would put on my credit cards and student debt, I kept track of every penny that went in and out of my hands.
At the end of my first month, I looked at everything I spent money on, created some generic categories that I could put each transaction into, and totaled up each category. But I didn’t stop there.
It was great to see where my money went that first month, but as any good budgeter knows — your budget will fluctuate.
So I tracked my spending for three months straight and, at the end of each month, I put new totals in the categories I came up with in the first month.
After three months, I added up the three monthly totals in each category and divided the total by three — to find the average I spent on every category each month.
The difference that tracking my spending for three months versus only one month made was huge. Not only was I finally seeing where my money was going, I could also see what type of spender I was.
It only took a few weeks for me to see that I was spending too much money on Starbucks, and I finally acknowledged my addiction to buying (way too many) books — I needed to cut back on both of those things, if I wanted to get myself out of debt.
Write a Realistic Monthly Budget
Finally, I took all of the information that tracking my spending had given me and used it to write my first monthly budget.
Because I used the averages from each of my original categories, my first budget was not only easy to write, it was also realistic.
For example, if I had spent an average of $214 per month on groceries, I allotted $225 for groceries in my budget. Doing this for each category not only made it easy to stick to my budget, it also gave me a sense of accomplishment at the end of every month I could successfully stay within my budget.
Two years ago, it took me three months of tracking my spending and a good few hours of analyzing the totals, before I could write my first budget.
I will never forget the collection of scribbled down transactions, tallies of spending in various categories, and sketches of budgets that filled my notebooks.
But today I can write a new budget in a matter of minutes, simply by looking at what I spent the month before and thinking ahead to what the next month will hold.
While tracking my spending for three months was the best teaching tool I could have used in learning how to budget, I still make mistakes.
I have confused which categories I put small purchases in, forgotten categories altogether and gone over some by hundreds of dollars in a month.
But none of these mistakes have ever stopped me from wanting to track my spending (which I still do today) or from creating and sticking to my next monthly budget.
About the Author:
Cait Flanders is the author of Blonde on a Budget, where she writes about her journey from being maxed out to becoming a balanced and financially sound woman. She is scheduled to pay off more than $28,000 of debt in just 24 months.
Find her on Twitter @BlondeonaBudget.