Financial stress can quickly become a significant burden on our mental well-being.

It’s 2024 —

Who isn't walking around worried and mentally preoccupied about paying the bills on time, and covering unexpected expenses?

Sprinkle a dash of disappointment and lack of control that’ll negatively impact your mood, sleep, and overall happiness.

It’s a burden we’re all carrying. Some with a heavier load than others.

So much so that my two recent posts have focused on the importance of passive income in today’s economic climate. ⬇️

What You Need to Know about Digital Marketing.

Why Passive Income Is Your 2024 Financial Powerhouse.

Now I’m back and ready to break down for you not only how important financial literacy is, but also how it’s impacting you mentally.

Starting with creating a realistic budget is the first of many steps that’ll combat financial anxiety and achieve peace of mind.

This blog will equip you with easy-to-digest money basics and strategies to build a budget that works for you and improves your mental health.

Look at you — Already winning!

How Do Finances Impact Mental Health?

Financial stress is a major contributor to anxiety, depression, and sleep problems. Worrying about money can significantly impact our overall well-being, affecting work performance, relationships, and even physical health.

By creating a budget you're taking back the power to take control of your finances, and reducing feelings of uncertainty and helplessness.

Seeing your money working towards your goals and priorities will significantly reduce financial stress and contribute to your greater sense of security and peace of mind.

How Do I Start Budgeting?

Starting a budget doesn’t have to be overwhelming. There are so many options for you to try and find out what makes sense for you.

Lucky for us this doesn't mean balancing out a checkbook. Our poor parents huh?

Here’s a Simple Roadmap:

1. Gather your financial information: Collect your income statements, bank statements, and any current loan information.

2. Choose your budgeting method: Decide what works best for you — a budgeting app, spreadsheet, or paper and pen. (Plenty of free options online)

3. Track your income: List all your income sources, including salary (after taxes), side hustles, and investments.

4. Track your expenses: For a month, record every single expense, categorized by essentials, savings goals, “fun money”, and any other relevant categories.

5. Calculate your net income: Subtract your total expenses from your total income. This is the amount you have “leftover” for savings and flexible spending.

6. Set realistic goals: Based on your net income, allocate funds towards your savings goals and “fun money” categories.

7. Review and adjust: Track your progress throughout the month and adjust your plan as needed. Be patient and celebrate your successes along the way!

Budgeting for Beginners: Monthly Guide

Getting started with budgeting can seem extremely overwhelming and daunting, making climbing Mt. Everest look like an easier option.

Let’s switch up that perspective by following these steps to help you build a sustainable monthly plan:

1. Choose your budgeting tool: Decide whether you prefer a budgeting app, spreadsheet, or a physical notebook system.

2. Gather your income information: List your monthly income from all sources.

3. Track your fixed expenses: List all necessary expenses that stay the same each month, like rent, utilities, and essential subscriptions.

4. Estimate your variable expenses: Allocate amounts for groceries, transportation, and other non-fixed categories based on your spending habits.

5. Include savings goals: Set a realistic amount you want to save each month and factor it into your budget.

6. Calculate your “fun money” amount: After accounting for essentials, savings, and variable expenses, allocate a reasonable amount for discretionary spending.

7. Track your spending throughout the month: Regularly record your purchases to stay aware of how your spending aligns with your budget.

5 Budgeting Tips for Mental Peace:

🫰🏼Track Your Spending: Before building a budget, it’s crucial to understand where your money goes. Track your expenses for at least a month, capturing every purchase, regardless of amount. You can use a budgeting app, or spreadsheet, or a notebook.

This is crucial for you to see the exact areas where you’re overspending and provide clear insights for your budget creation.

🫰🏼Prioritize Essential Needs: Once you have a clear picture of your spending, categorize your expenses. Essentials like housing, utilities, groceries, and transportation come first.

Allocate enough funds to cover these needs comfortably before anything else.

🫰🏼Embrace Realistic Savings Goals: While saving might seem daunting, each small step makes a significant difference. Start with a realistic and achievable savings goal, whether it’s building an emergency fund, saving for a vacation, or contributing to your retirement.

Seeing your savings grow can be incredibly motivating and contribute to a sense of financial security.

🫰🏼Identify Flexibility: Not every expense falls into a fixed category. Allocate a reasonable amount of “fun money” to cover occasional entertainment, hobbies, or dining out.

This helps maintain a sense of balance and prevents feelings of deprivation, which can lead to overspending in the future.

🫰🏼Review and Adjust Regularly: Life changes, and so should your budget. Review your spending habits and adjust your budget accordingly. If you're consistently overspending in a category, look for ways to trim back.

This flexibility ensures your budget remains realistic and sustainable.

Creating a budget is not just about managing money — it’s also about nurturing your mental well-being.

When you decide it’s time to take back control and start using these budgeting tips and guidelines you’ll immediately gain a clear understanding of your relationship with money.

It’s never too late to take control of your finances and recognize that you’re also prioritizing your mental health.