Hey there, creatives! Welcome to the ultimate guide to budgeting. Whether you’re a freelancer or an artist, this guide is here to help you make a budget that works for YOU.
Why Should I Budget? 🤔
Wondering why you should bother with a budget? Let’s break it down.
A budget is a plan for your money that will help you keep things in check. It considers what’s coming in, what’s going out, and what you can stash for later. Think of it as your financial GPS, guiding you towards your goals.
Budgets are key for helping you:
- Set spending boundaries 🚫💸
- Crush those pesky debts 🦸
- Cut down costs and build up your savings 📉💰
- Stay in your financial lane 🚗💨
- Kick financial stress to the curb 🥋
- Have more money for the things you enjoy 🌈💫
- Feel like the boss of your wallet 🤑💼
How to Create Your Budget 📝
Creating a budget can seem a bit intimidating, but trust us, it’s like designing your own financial masterpiece. Here’s how you can get started:
1. Perform a Cash Assessment 🔍
The first step in budgeting is to figure out what you’re making. Add up all those freelance gigs, creative side hustles, and any other sources of income.
2. List Those Expenses 🧾
Spill the tea on your expenses! Make a list of all your monthly costs, whether it’s rent, Netflix, that never-ending Adobe Creative Cloud subscription, or your fave matcha latte. This will help you uncover where your money disappears to.
3. Prioritize Like a Pro 👑
Now it’s time to prioritize and decide what’s a “need” and what’s a “want.”
- a “need” is an essential. Think rent or food.
- a “want” is all the extras like eating out and vacay plans.
What’s a “want” for someone might be a “need” for another. Take a car, for example. If you’re living near public transit, it could be a “want.” But if you’re stranded without it, it’s a “need.” It’s normal for your priorities to change over time, so remember it’s all about balance.
4. Set Those Goals 🎯
Pinpoint your short-term and long-term money goals, and integrate them into your budget.
- Short-term goals could involve tackling credit card debt, cutting weekly expenses, or kickstarting an emergency fund.
- Long-term goals might include becoming debt-free, saving for a vacation, home or vehicle, investing in education, or planning for retirement.
What to Include in Your Budget 📊
Wondering what exactly you should include in your budget? Here’s the lowdown:
1. Rent and Bills 💡
Start with the essentials – rent, utilities, groceries, transportation, and loans (if you’re still dealing with those). Paying these first ensures you’re keeping a roof over your head and the lights on.
2. Business Expenses 💼
As a creative professional, you might have unique expenses related to your craft. This could be camera gear, art supplies, software subscriptions, acting classes, or even marketing costs. Track these and budget for them – it’s an investment in your future success! 📸
3. Emergency Fund 💪
Life has a way of throwing curveballs at us when we least expect it. Include an emergency fund in your budget – it’s like having a safety net in place.
4. Fun Money 💃
Don’t forget to leave a little room for fun – treat yourself to a night out or that concert ticket you’ve been eyeing.
Ways to Track Your Budget 📈
Now that you’ve got your budget in place, let’s talk about how to keep tabs on it. Here are a few ways to track your financial progress:
1. Budgeting Apps 📱
Having an app at your fingertips makes budgeting a breeze. Wirecutter recommends using Simplifi by Quicken, or You Need a Budget (YNAB) for an easy and secure solution. These apps will help you visualize your spending and savings goals.
2. Good Ol’ Spreadsheets 📊
If you’re more old-school, spreadsheets are your jam. Create your own customized budget sheet, or download a template in Excel or Google Sheets.
3. Cash Envelopes 💰
This one’s for the tactile creatives. Label envelopes with different spending categories (rent, groceries, fun money), put cash in each, and spend only what’s in the envelope. When it’s gone, it’s gone!
Remember, budgeting is all about finding what works for you. Feel free to mix and match these methods and stay flexible.
After testing out your new budget, it’s important to make sure it’s working for you. If your spending has been straying from your budget, consider tweaking your numbers to be more realistic.
When you’re comparing your budget to your spending, consider this:
- Are there any major gaps between what you planned and what you spent?
- Where is your budget taking the biggest detours?
- Are those differences a one-time thing, or will they become a habit?
- Can you save enough cash to hit your financial goals or pay off your debt?
Set a reminder, or mark your calendar to review your budget monthly. When it’s a habit, you’re more likely to stay on the right track!” 💪📅💰
Want More Help with Budgeting? Check out These Resources 📝
- Tiller – the functionality of a budgeting app visualized in a Google Sheet or Excel
- New York Times Budgeting Template – a free budget template to download and customize
- Government of Canada Budget Planner – a budget planner for Canadians
- How to Make a Budget in Excel – a Microsoft tutorial
- Budgeting Tips from a Freelancer – 10 budgeting hacks
- 50/30/20 Rule – the rule you’ve heard of broken down