I mentally can’t understand how to start a budget

General
1

Always hate reading long posts. Gonna try to keep it short. Rent- $2400(mortgage including escrow) Internet- $50 Car-Insurance only cars paid off. Credit card payments- $500-1000 a month. I’ve let these slip away some over the past year. Most are no interest. One is a 8.99% interest loan that is $400 a month. There is 1 with 12% interest 5k balance. Electricity- <$200 Food- :money_with_wings: no clue and scared to find out. Idk how to even track this.

Salary- 63k Monthly take home- $3600 Rental income- $1000 a month

How do I start a budget!? I am 35(M) family of 5- 3 young kids. I’m the only one working. We don’t feel like we overly spend, but we don’t track it all. We track most, but we also buy random. I think where I lost the credit cards was when my wife and I both started using multiple cards instead of 1. Mortgage story- just purchased a house that we plan to use as Airbnb rental property once we decide our next move. We are leaning towards getting an RV and living in that for a year. Where do I start? Break it down to me like I’m 5 years old. I have a mental block when I hear budget.

2

Track every dollar spent each month using bank and credit card statements. Cut back until balanced.

3

Write your income in one column and expenses in another. Add both up and ensure you don’t overspend!

4
  1. List all your known monthly expenses (debt included)
  2. Think about all your non-monthly expenses. With real estate you’ll want to ensure having some emergency in case of vacancies. You can google more of these. But make sure you include these as sinking funds in your monthly budget.
  3. Also think about savings and long term savings. This should be considered an expense.
  4. Subtract your income minus your expenses. The result of all this planning should be $0. This means you’ve created a budget that zeros out.
5

@JOSH Agreed except I would recommend paying down credit cards before working on savings. Expect for the emergency fund

6

Track your net income and categorize expenses: fixed, investing, saving, and fun. Keep fixed costs below 50%.

7

It seems you’re overspending and avoiding it. Track your max spending and savings goals. Compare expenses over 3 months, clear your credit card, and budget for home repairs.

8

@PEY This is true, there is a fear that if you budget, you may come to a very difficult truth that you don’t want to face. The sooner you face it the better