Do you find yourself constantly worrying about how you’re going to make it to your next paycheck? I know I used to when I was living alone in an apartment that was too expensive for my singular paycheck after my roommate left me high and dry. (Okay so maybe I’m still a little bitter about it. What’s it to you?)
Today I’m going to let you in on my top tips and tricks for how to create and stick to a budget so you hopefully never have to worry about money again.
Step one: figure out your necessities.
- Do you really need a two bedroom apartment if you live alone? If you answered no, maybe it’s time to move
- Are you stuck in a lease and can’t move without shelling out a ton of money? Try to find a roommate.
- Cut out cable and internet. If you already have internet on your cell phone, you can manage without wifi.
- Do you really need to go buy coffee every morning before work? Sometimes you have to settle for homemade. It grows on you, I promise.
Step two: Make a list of monthly bills and payments. Always round up.
- Rent – This amount should never change so you can list the exact amount.
- Gas for your car
- Car insurance
- Water/ Sewage/ Garbage
- Phone Bill
- School loans
Step Three: Subtract previous amounts from total monthly take home pay.
- For example: you get paid $800 twice a month and your monthly bills add up to $1,100. You would have an extra $400 a month (or $200 per paycheck) for food and other miscellaneous items.
Step Four: Budget for food. Rounding up again.
- Look at your spending habits over the last months and figure out on average how much you’ve spent each month. (Ideally for one person on the income we’ve set out, this shouldn’t be much more than $200/month)
Step Five: Split what’s left in half. Half will go into a savings account and the other half is for you to spend on whatever you want. This way, you’re treating yourself for sticking to a budget and also saving money for emergencies or maybe even a vacation.
Now that we’ve calculated our expenses, what do we do with our money?
- Separate your money into envelopes that are labeled for each bill or category. I hate using cash so If I know I need to save up for something I’ll take the money out of my bank account and put it in a jar in my room for safe keeping.
- Set up automatic deposit out of your bank account for your bills, withdraw only the money you need for groceries and gas to keep with you. Keep your debit card in a safe place so you don’t feel tempted to use it. (The same goes for any credit cards)
- Utilize your savings account. If you don’t like to deal with cash, make sure all the funds you have estimated for bills remain in your savings account and pay your bills from there. Obviously gas and groceries will stay in your checking account for ease.
In my experience, the most difficulty I have in sticking to my budget is grocery shopping since you really can’t put a price on sustenance. The easiest way I’ve learned to combat this is by meal planning. I usually will plan my meals two weeks in advance and then create a grocery list for only what I’ve put on my meal plan. By doing so, I cut down the time I spend wandering through the store and also I am able to avoid the ice cream isle unless absolutely needed. Of course, if you have a little extra left over for ice cream then by all means, treat yourself!
It’s also important to look for and utilize coupons to save a bit of money here and there. Keep in mind where the deals are in your area. Try to stay away from “out of season” fruit and vegetables and remember that meat will likely be the most expensive items in your cart. There have been many times that I’ve had a small basket of items that came with a pricey tag because I wasn’t mindful of that. If I know I have a small budget for the shopping trip I’m on I will keep my phone calculator open and add the prices as I go through the store. It seems a bit ridiculous as your doing it but it will save the shock when you make it to the register and suddenly you’ve gone above your budget three times over.
There you have it. I know it’s not much but that’s what’s helped me get and stay on track with budgeting my money. Do you have any tried and true methods? I would love to read them and see how I can implement them into my current routine!
Today I’m thankful I am able to budget my money to help pay off debts in a timely and mostly stress-free manner