Become an Adult | Budget Like a Boss
There are many, and I mean many, articles out there that will show you how to create a household budget. And I have tried numerous budgeting layouts as well as strategies. And they have mostly all worked out for me. I was able to see where my money was going and make improvements month after month. The reality is, most of the budgets will work as long as you decide to make them work. Be dedicated to your budget. Why?
Because it’s how you start adulting. The only way to start becoming an adult is to make the decision to take responsibility for your life. And the first and best thing you can do is to know your starting point. You can’t make an informed, good decision without, well, being informed. Can you afford that vacation with your friends? Should you buy that coat? How much can you spend on food? Do you need to get a part-time job? Etc.
So, let’s start out with the basics:
How much money do you have in your bank account (savings)?
How much do you make monthly?
And how much do you spend monthly?
It’s simple math from there. On a very basic level the goal is to be making more money than you are spending. Do you end up spending more than you earn? If so, it will eat through your savings rather quickly. And be mindful, usually banks have a “maintenance fee” (or some sort of fee) if your account dips lower than a specified amount. If you do not have enough in an account and bounce a check, there will be fees! These unnecessary fees add up, especially if you are unaware of where your money is going.
What is your starting point?
Are you working with a blank slate? No debt? Spending the same amount as you earn every month? Are you in debt? Working off loans or credit card balances? Are you already saving money? Spending less than you earn?
If you are in debt, it is important to understand why. Don’t get depressed, just understand your starting point and make the decision to work it out. Make a plan. Budget. Understand your spending habits and notice where small changes can be made. Over time, these small changes will have big results. Debt repayment is beyond this blog post, but the basics of budgeting and the free pdf budgeting printable will still be helpful in understanding your starting point.
If you are either already saving or starting with a zero balance your first priority is still to see where your money is going. Fill out this budget printable here with either this month or last month’s information to see the flow of your money. Write down your monthly expenses, that’s right, all of them! Included in the free downloadable budget pdf is a list of common expenses to help you out. It may seem tedious to write down every little expense, but without knowing what you spend you may not know what next step you should take.
For example. Do you know how much you are spending on food? If you have a zero balance every month, and have no money left-over to add to savings, this category is normally where a lot of money goes. Yes it is a necessity. BUT how often do you eat out? What types of items are you purchasing at the grocery store? Are you buying ready-made foods, which are typically more expensive than purchasing ingredients and cooking dinner yourself. Are you planning your meals? Are you shopping for foods on sale? If you find that your food budget is a little bloated, you can find ways to spend less in this category.
It isn’t about living without. The lifestyle of an adult is learning to make a life within your means. There are a ton of easy and delicious meals you can learn to cook yourself for a fraction of the cost of going out. It will not only be cheaper, but also as you develop some cooking skills you may find you prefer your cooking over dining out. You can still go out by understanding your budget and setting money aside for that purpose so you do not feel as if you are missing out.
If you are missing the social aspect of dining out, you can always invite your friends over for a meal or drinks! Show off your skills. Have themed evenings or host a game night. You can have pot lucks – make your friends bring a dish with a recipe for people to share. Making your own drinks or purchasing a large case of beers is infinitely cheaper than going to a bar. And hosting a fun evening with your friends can be more entertaining than going out!
In this way go through your budget category by category. Be honest with yourself and set a realistic savings goal. Do you want to save $50 a month? $100 a month? Pick something that won’t cause too drastic of a change, because this is a lifestyle. We want to create good habits that are sustainable.
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