What to Expect in Your First 3 Months of Budgeting

What to Expect in Your First 3 Months of Budgeting

Most of us have an iconic and memorable first-time-on-a-bike story. Maybe your story starts with a slow-motion wreck in the yard but ends with a smooth sail down a hill, wind in your hair.

Think about what happened between the beginning and ending of that story, though. Somewhere along the way as you were learning to ride, you doubted your abilities because you fell or crashed or just didn’t get it. But you kept at it and eventually learned to ride.

And that’s how it goes with budgeting. As with any new skill, budgeting requires a little bit of practice and patience to get right. And we know you can do it! For most users, it takes about three months to go from novice to know-it-all.

If you’re brand-new to budgeting, we’re here to help! Follow our quick and easy guide below:

Month One

Your Goal: You’re no accountant (unless you are!) so go ahead and set your expectations accordingly. Make it easy on yourself and go through your bank statement from last month to set your housing, transportation and food costs. Doing this will give you a realistic starting point for tracking expenses. Give yourself a little room for error here. The first month is all about getting to know your budget and even learning to have fun with it.

Focus on This: With your budget made, do your best to stick to it. You’ll probably mess up this month and that’s okay. By tracking your transactions you can easily see the categories where you’ve spent too much or where you have money left over. Did you spend more on your grocery budget than you budgeted for? Adjust another category—like clothing or entertainment—to get your budget back to zero.

Helpful Hint: Try a free trial of EveryDollar Plus to make tracking your transactions effortless. We’ll connect to your bank account and upload all your purchases and payments. That way you don’t have to rely on receipts or your memory!

Month Two

Your Goal: Learn from last month. Remember the mistakes we said you’d probably make? This is how you make the most of them. You’ll use hard data from the past 30 days to adjust your budget and plan for the weeks ahead.

Focus on This: Determine where you overspent or underspent in the previous month and decide how you might fix these budget categories moving forward. Do you need to up your planned amount on groceries or find ways to lower your caramel latte intake? Make some tweaks (always ending up at zero) and see how your changes hold up to reality.

Helpful Hint: Maybe your Miscellaneous category lumped everything from a doctor copay to teeth whitening strips together. If you find that your “catchall” category includes too much, create breakout categories labeled Copays or Toiletries. There’s no limit to your line items.

Month Three

Your Goal: Move over amateurs, you’re about to go professional. For the past 60 days, you’ve tracked and tweaked your budget. Now it’s time to evaluate how you’re spending your money. In other words, it’s time to start shaping your budget around your goals.

Focus on This: Work your way through the Baby Steps. Do you need to pay off debt? Invest more in your retirement? Or save for a house? Consider smaller goals too, like saving for vacation or Christmas, a new car, or a home upgrade. Play around with your budget, starting with your highest priority and moving to your lowest. We always suggest budgeting in this order: giving, saving, necessities and then wants.

Helpful Hint: Look for areas where you can save even more money—like renegotiating your insurance premiums or shopping for generics over name brand. Once you start looking, you’re bound to find many more ways to save!

At the end of 90 days, you should be able to create a new monthly budget in just 10 minutes. Think about it: just minutes a month—and a commitment to sticking with your plan—could totally change the trajectory of your life!

Make life even easier with our free EveryDollar budgeting app, accessible from your computer, phone or tablet!