You, however, are about to know my financial situation intimately, as today I'm going to write about making a budget and use my real life budget to illustrate. I know there are a million ways to budget, a million tactics to stick to it, and a zillion people with lots of opinions on it. I'm going to try to show you a simple approach that works for me.
There's a lot of software are stuff to help you budget, but I'm going for a step by step you can do with some paper and a calculator.
1. How much money do I make in a month? If you're on salary or work the same number of hours each week, this is easy. I work different hours every week at different hourly rates so I had to average it out as best I could. Add in any money your parents give you or other income. Write your total monthly income on top of the page. Underline it.
Income- $1700
2. How much do I spend on my expenses? These are the things you have to pay, and the amount is pretty inflexible. Write it all down and add it all up.
Rent- $500
Student Loans-$250
Car Payment-$170
Car Insurance-$135
Utilities- $100
Gas- $100
Expenses- $1255
This is where I start to have a lot of feelings. First I imagine this Skyla ad except the swing is just filled with FedLoan statements. Then I think "Wow, look how responsible I am!" Then I get that calculator out, throw back to middle school algebra and realize I'm working until the 22nd of the month to pay for the basics, and I haven't even bought groceries yet. Then I listen to Hand in My Pocket by Alanis Morissette and take some deep breaths.
3. Now you can see how much you have left to play with. This is the portion of your budget that you have the most control of on a day to day basis, so I divide it up by week.
$1700-$1255=$445 per month
$445/4=$110 per week
Now is where you really need to think about how you spend your money. If you've been using your debit or credit card it's really easy, just check out your transaction history. If you're anything like me, you will be shocked and appalled by how much of your hard earned cash is going almost directly to Dunkin' Donuts.
Sketch out a few categories and assign a goal amount for them. I'll run you through mine.
Groceries- $25
A girl's gotta eat.
Food/Coffee on the go- $15
I'm a busy lady, and I basically work out of my car so this is a necessity for me. But watch this one, it adds up crazy fast.
Social- $30
This includes going out to eat, buying drinks, T fare to and fro, movie tickets, whatever.
Miscellaneous- $20
This is easy to forget, but you're gonna need shampoo, new socks, ibuprofen, whatever, more often than you might think.
That's it! I stash the remaining $20 in my savings account, which we'll talk about next week. Though I admit savings is the first to go when I go over somewhere else. Mostly on coffee. Or bar food. Oops.
Because my hours are so varied, I made my budget with only the income I can rely on week to week. Any extra jobs I pick up live outside of the budget, and that's the money I use on clothes, treats, pretty stuff for my home. Basically to spend at TJ Maxx and Target.
When you're coming up with this part of your budget be honest with yourself. If you need a "beer" or "takeout" category to accurately reflect the way you spend put it in there. It's not like your parents are going to see your budget. Unless you post it on your blog.
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