Single Woman’s Guide to Budgeting

posted on : February 28, 2023 posted by : Alexis 5 Comments

Are you a single woman? Are you trying to learn how to budget on one income? Well you’re in the right spot. This is where you’ll find the single woman’s guide to budgeting.

I bet you’ve seen it a thousand times. Every personal finance guru, myself included, will start out with the same two pieces of advice.

Track your spending
Build a budget

But I bet you’ve thought to yourself “that’s great but can someone show me HOW to create a budget?!” Absolutely someone can.

Hi, it’s me. I’m the someone!

The Single Woman’s Guide to Budgeting

This is a guide built for a single woman, by a single woman. I am a single woman and have been living on one income for quite some time.

I was 22 when I bought my first house and I’m still living in that same house without issue. I must be doing something right!

How did I manage to maintain my house without going into egregious debt? By following the exact steps I’m about to give you.

So, without further ado, here is the single woman’s guide to budgeting!

What Is a Budget Exactly?

A budget is just telling your money where it is going instead of scrambling to figure out where it has been.

All a budget is doing is telling you how much you have to spend on a certain category. It’s saying to yourself: “I won’t spend more than X amount on Y thing”.

Setting a budget will help keep you accountable for your money and force you to focus on where it’s going.

Alright, now that you know what a budget is, how do you start one?

Track Your Spending

The very first step to any financial change is to learn how to track your spending. There is no way around that.

Let me repeat myself on that because this is the hill I’m planning to die on: there is no way around this.

In order to figure out where you’re going, you must first figure out where you are. If you try to set a budget without tracking your spending first, you will end up sad and frustrated on the floor in the fetal position.

That is the last thing I want for you so seriously, track your spending!

The easiest way to do this is by using a finance tracker. I’ve already built a finance tracker that you can use, as well as written detailed instructions on how to use it.

As the saying goes: what gets measured, gets managed. Tracking your spending will give you the data you need to make changes, then it will give you the data to assess progress.

Track for Three Months

Tracking your spending is a habit that you must build and keep. Once you’ve customized your finance tracker and mastered how to use it, you have to do it for three months straight (at a minimum) before you can set a budget.

Why three months? Because no two months are exactly the same.

If you tried to make a budget off of one month of spending, you would be disappointed in yourself when soccer practice started back up again and you’re spending a lot more in gas then you were last month. But, it’s not your fault. Soccer practice wasn’t happening last month so you didn’t catch that expense in your finance tracker.

So, by tracking your spending for a minimum of three months, you will get a realistic average of what you’re spending.

In order to determine a realistic budget, you need a realistic average.

Budget Tracker

Okay, now that you’ve tracked your finances for three months, you have a realistic idea of your spending and now you’re ready to figure out your budget.

The first thing you will need is a budget tracker

This budget tracker was built to mimic the finance tracker, so there shouldn’t be any major surprises when you open it. There are just a few more fields to fill out. Don’t worry, I’ll show you how.

An important thing to remember about building a budget is that a budget is not static. As I’ve already said, no two months are exactly the same. There are expenses that only come up every quarter or once every year, such as glasses or insurance. The best budgeters build budgets at the beginning of each month, depending on what expenses they are planning to have that month.

….did you download the budget tracker yet? Okay, cool. Now we can talk about how to use it.

Determine Fixed Income

The first step to building a successful budget is to know your fixed income.

Be aware that I said fixed income. This is guaranteed, forty hours a week income. This does not include any overtime or extra shifts.

Why?

Because overtime or an extra shift is not guaranteed. It’s important to build a bare bone budget off of your guaranteed income. If you’re building a grocery budget off of overtime, what happens when the overtime isn’t there?

If you do get those extra shifts or overtime, that’s awesome! We can determine where that extra cash in going later. For now, concentrate on assigning a job to only your fixed income.

Determine Your Fixed Expenses

After you determine your fixed income, you’ll want to determine your fixed expenses.

Basically, you just need to ask yourself: “If I didn’t buy anything at all this month, what would I still have to pay?”

This includes things like your mortgage or rent, insurance payments, phone bill, or vehicle payment.

On your budget tracker, that table looks like this:

Fill in all your fixed expenses in order to determine how much of your fixed income these expenses are taking up.

Keep in mind that this doesn’t mean fixed necessary expenses. This could also include things like your Spotify or car wash subscription.

(We will get into necessary vs unnecessary expenses later)

Determine “Leftover”

Now that you’ve filled in your fixed income and your fixed expenses, you’ll want to see how much is “leftover”.

Why “leftover”? Because it’s not actually leftover. It will still have a job. It’s just the leftover after all fixed expenses are paid.

You will find the leftover table at the bottom of your tracker.

This is the portion you will divvy out to all your other expenses.

Determining YOUR Budget

Now that you have all the data in front of you and you know all your numbers, it’s time to start determining how much will be aliquoted to each expense category.

This is where that realistic average from your three months of financial tracking will come into play. You will take the average for each category from your finance tracker and use that as your beginning budget.

If your average for groceries was $350 a month, use that as your budget for this upcoming month.

The point of setting a budget is to make sure that you pay attention. You will have to actually track how much you spend at the grocery store as well as second guess some of your purposes in order to say in budget. Knowing you have a capped limit will force you to pay better attention to what and where you’re spending.

In your budget tracker, your determined limit will go here:

Everybody has different lives so you will need to determine your categories for yourself. The three most popular categories are already listed in the beginning. You can copy your categories straight over from your finance tracker.

Tracking Your Budget

Alright, you’ve carefully calculated your budget based on previous spending and you’ve entered your spending limits in the budget tracker. Now what?

Now you’re back at step one. You track your spending just like you were doing before on the finance tracker. The only difference now is that you’ll have to do it more frequently.

With the finance tracker, you only have to track your spending once a month. With the budget tracker, you will have to track your spending every week or every paycheck. The choice is up to you – just make sure that you are filling in your spending data on a regular basis.

Treat this exactly as you were treating the finance tracker. You find the day of the month that the charge occurred, then you fill it in under the appropriate category.

As you fill in the data, a progress bar will show you how close you are to reaching your limit.

Pick a standing day to input all your data. You could sit down on Sunday evenings and input all data from the week prior. Another option is to fill your data each pay day. By attaching the ritual to something repetitive, you will know exactly when it needs done. It will become another habit for you the longer you continue to do it.

Build in Fun

An important thing to remember about creating a budget is to remember to build in fun.

A budget isn’t about getting rid of everything you enjoy, it’s just reducing it or finding alternatives. If you stop spending money on all the things that bring you joy, you will certainly fail.

If you like going out with friends, cut it down to once a week or host a night in. If you like to craft, check out thrift stores or secondhand craft stores to get materials. There are plenty of ways to save money, no matter what you enjoy doing. The important part is remembering to budget for them so that you set a limit for yourself and force yourself to pay attention to what you’re spending.

Check out these frugal family activities from Debt Free Forties.

You can also use these frugal girls’ night ideas from Saving and Simplicity.

Making Room in Your Budget

You made your budget and things just aren’t adding up. Even after putting in your averages from your finance tracker, you’re still coming out negative.

So, how do you make room in your budget? How can you prevent being in the negative every month?

The first and most obvious answer is to increase your income. You can ask for a raise at work, start a side hustle, or switch jobs. Just remember that if you increase your income, you do not increase your budget if you are starting in the negative. You’re just trying to get back to zero.

Increasing your income might be the most obvious answer, but that is easier said than done. So, how else can you make room in your budget so you can break even each month?

Here’s some ideas on where to cut back:

Cancel subscriptions you aren’t using – Do you have Hulu or Disney+ that never gets used? Cancel the subscription. It’s only $10-$15 a month but it does add up.
Cancel subscriptions that aren’t worth it – Do you have a car wash subscription that you only use once a month? If it’s costing you $30 a month and one car wash only costs $12, the subscription is not worth it.
Do the work yourself – Using the car wash example again, could you start washing your car yourself? Or give your kid some cash to do it?
Switch internet/cable providers – Can you switch to a different internet provider? Sometimes, if the company finds out you’re going to cancel, they will give you a discounted rate as well.
Reducing your budget – Can you reduce your grocery budget by $50 this month? You can use these grocery store hacks to help with that.
Dial back some donations – Are you making monthly donations to an organization? Can you dial that back a bit. Once you get your finances under control, you can start donating again but for right now, you can’t afford it and that’s okay.
Get serious about needs vs. wants – This is a hard one but it’s time to get serious about your needs versus your wants. Getting your nails done is a want, not a need. Can you do it every other month or only once a month vs every other week? Find ways to cut back on your wants in order to make room for your needs. (Note: some things are not necessary like most people think they are. Example A: a vehicle).

Using a Budget to Save

If you’re looking at building a budget, you are probably trying to build your savings or save for something important.

Building this into your budget is incredibly easy. Just determine how much you want to save each month and add that to your fixed expenses. For example, if you want to save $200 a month, you’ll put $200 as part of your fixed expenses and then automate that amount to a savings account.

By building this into your fixed expenses, it will lower the leftover you have to divide between your categories.

Use this savings tracker in order to keep track of how close you are to your savings goal!

If you’re trying to build up a savings account, make sure you’re using a high interest savings account in order to make the most of your money!

Using a Budget to Pay off Debt

Much like using a budget to help you save, you can also use a budget to pay off debt faster.

Minimum payments are what keep people poor. You can use a debt pay off tool to determine how much faster you could pay something off by making extra principal payments.

You can then build that extra principal payment into your budget to help get the debt paid off that much faster.

If you have multiple debt streams, you can download this free debt tracker in order to keep track of your payment schedule!

For example, if your minimum car payment is $350, could you make it $400 and then build out the rest of your budget using that new payment amount?

Paying off debt and funding an emergency fund are the top two reasons people start budgeting in the first place.

Extra Income

If you are building a budget based on your fixed income, what do you do when you get some extra cash that month?

The answer is: whatever you want.

Some suggestions from The Frugal Dreamer:

Add the extra to your emergency fund until you have 3-6 months of income saved
Put the extra towards the principle of your debt
Stock your vacation fund
Invest in your 401k or IRA
Contribute to a child’s savings account or college fund

However, if you want to use the extra cash to take yourself out to a nice dinner or buy that handbag you’ve been looking, then you have the freedom to do that as well.