LET'S TALK MONEY: How and What to Budget
Hey, y’all!
This is the first entry in this new series of posts I wanted to do, called “Let’s Talk Money”. Money isn’t something that a lot of people talk about freely. We all use money, we all need money so it shouldn’t be that difficult to talk about… but it is. There is a lot of shame around money. If you make too little, you’re ashamed but if you make too much, you can be shamed for that as well. So in my Mike Jack voice, “you can’t wiiin chiiiile, you can’t break even, you caaaan’t get out of the gaaaaaaame”…
“BUT I’m here to try and make it a little less hard as a subject for those who may be silently struggling. ”
Money management is not something that you just “know”. We aren’t taught it in primary school and honestly, we aren’t taught it in college either. Somebody has to teach you OR you have to try and teach yourself. Because honestly, the most I remember being taught was how to fill out a check and in this day and age, nobody really uses paper checks that often sooo… that’s a bit null in void.
If you’re like me, you’ve had to learn how to be fiscally and financially responsible through trial and error. I feel as though I have a really good hang of it now and since I also work as a budget analyst (which is really different than planning a personal budget but still has its similarities) I have become really familiar with MONEY and the budgeting process.
“Stop swiping that credit card! Focus solely on spending money you have NOW, not on what you can borrow. ”
As a college student I racked up credit card debt and at the time it felt like it was taking over my life. In hindsight, it was only about $2k worth of debt (believe me, I say “only” because the damage got worse as I made more money but we’ll talk about that in a later entry in this series). So, being a broke post-college student, I had to figure out how to live life without the random influx of funds called a “refund check”.
My first step was starting to use the envelope method, in which you place a certain amount of cash in an envelope and label it ‘groceries’, ‘gas’, etc and use only what’s in that envelope to make those purchases. It made me more aware of the cost of things because when you swipe your debit card, you don’t really get the gist and feel of there being less money in your bank account. If there’s less money in your hand? You “get” that immediately.
The step that I feel should be your true first step is to take a look at the amount of money you take home from work a month and compare it to the number of purchases that were NOT necessities last month and see what the damage is. Spending on small purchases of things you really don’t need adds up! For the next month, you could be adding that towards savings for a future big purchase/vacation or paying down a debt you owe. Either way, eliminating or at least minimizing unnecessary spending is key if you’re trying to get a hold on your finances.
An example of my old list of bills
You should have all of your bills written down with the minimum amounts due plus all of their due dates. Here’s an old example of how I had this on the first page of my budget notebook. You should use this to figure out your budget of required spending which helps you understand where your money is during the month. So, if you get paid on the 1st and 15th, you should have your bills from the 1st-14th labeled with their amounts and your bills for the 15th-30th labeled as well. If you add both sides of those up and compare it to your take home pay, you will see how much money you have left over per paycheck to budget out entertainment, savings and miscellaneous funds.
Another really great thing that I started to do was have my “fun/going out/entertainment” money put on a separate debit card than my regular debit card. I have my “fun” card receive a certain amount of money each paycheck so that my money for going out is on a completely different card than my responsible money. Having this separation of funds and not carrying my debit card with me when I’m out*, allows me to be responsible without really being responsible seeing as the opportunity to mess up the money I budgeted for, is gone!
*If you’re going to be out drinking and all, please link your REAL debit card to your Uber/Lyft accounts as you should ensure you always have money to get home. Please drink responsibly.
Just tweaking these few things, can change your relationship with money by a lot! These things helped me create the positive financial relationship that I have now and as I make more money and grow career wise, I have to continue to learn new tips and tricks to accommodate my spending over time. As I grow and learn, I want to share with you!
The next segment in this series will be about my favorite apps and tricks that I use, to save my money. It will include apps that will save FOR you if you can’t remember to do it yourself.
The accompanying in depth video with more tips and tricks for budgeting will be release on YouTube this Thursday (8/26) so make sure you’re subscribed to my channel! Let me know what else you’d like to see from this series so we can make this happen together!
xo,
Keri Kontours