Anyone else feel like money is one of those things that constantly gets thrown around, but is rarely actually talked about? From a young age, I have always been money conscious. I remember even sitting down with my mom when I was ten, trying to come up with a savings plan..like who does that? But, many times, as adults we are thrown into “the real world” with little to no experience on how to budget properly and little knowledge on what it really takes to feel financially stable. I have never been able to understand why we don’t take more math classes in high school and college that center around prepping you for how to handle your finances in adulthood, whether it be saving up for a house, paying off student loans, or knowing how much to put into savings. I don’t know about you, but that was never taught to me in the multiple math courses I took throughout my life. I had to turn to my parents, and learn the hard way sometimes, on how to really look hard at my finances and try to figure out what I could really afford, and what the best tactics were in order to stay on budget. So, I wanted to share some of my favorite budgeting tips with all of you that works for me and the hubs. I know a lot of us have goals in the new year, and if getting better at budgeting is yours, hopefully a few of this ideas will help you out!
- Write out your plan
I am not fancy when it comes to budgeting. For some people, excel documents work, but for me, I like to write everything out and cross it off as it is paid. So, I typically plan out about 2-3 months in advance and continue to add to it to make sure I am always budgeting 2 months ahead of time so I can always see what I really need to budget for. When you are writing out your plan-put in your income for each check and their amounts (and your significant others if you have that extra income) and allocate what you HAVE to pay each month under those checks. You want to make sure that you are always ahead of schedule for when the bills are paid. So, if your rent is due on the at the end of the month, you want to make sure the check before that will be paying for it. Or, if your car payment is due at the beginning of the month, you want the check at the end of the month before to be allocated to that bill. When you are putting together this budget plan, remember to include all mandatory monthly payments (utility bills, rent, car payments, student loans, etc.). Then, you want to have a little wiggle room in there as well (in case for some reason a bill is higher than expected, etc.) and if possible, always budget out your savings. I put an example below:
May 1st, Check #1: $1500
Misc (Anything fun you want to do): $200
Total: $1350 (with $150 of wiggle room)
May 15th, Check #2: $1500
Car Payment: $200
Credit Card Payment: $400
Total: $1200 ($300 of wiggle room).
Obviously, this is just an example, but essentially always budget ahead for all your reoccurring expenses, put money away to savings (or an emergency fund as some people call it), and make sure you leave yourself some wiggle room.
2) Pay Your Bills In Full ON TIME
Ok, I know for some of us, this isn’t always possible if we have a ton of debt on our credit cards. But, just paying the minimum payment isn’t going to do the trick. Your interest most of the time is crazy on credit cards, so if you are spending the money and charging it on the credit card-make sure you have the money to allocate right back into it to pay it off. I personally use my credit card on nearly everything because I want to rack up points, but I always make sure if I am spending the money, I can turn around and pay it off. If you have a large amount of debt on your cards, look at which one has the highest interest, and work on paying that down first. And, then make your way to the others. Just remember only spend within your means.
3) Save, Save, Save
You have to make sure you are putting a certain amount into your savings. Even if it is only minuscule amounts at first while you are trying to pay off your credit cards, make it at least something-$25, $50, $100-who cares! As long as it is something that is helping prep you for your future or any unexpected expense that comes your way, it is worth it. Personally, we always try to put at least ¼ of our earned income each month back into savings, and once we pay off our car we will put in even more. It is so important to not only have savings in case something unexpected happens, but also to have stability for your future.
I hope this tips have helped give you a baseline of how to really begin to budget properly. Again, it is always more difficult at first to implement something new, but once you get going you wont look back..and your bank account will thank you for it 😉