How to Budget When You’re (Close to) Broke

Ahhhh… Money. Everyone’s favorite topic, right?

Ugh.

It’s one of my least favorite things to talk about. But as I’ve been writing these posts, I’ve realized how much of my behavior is dictated by trying to save money in these little ways. So I thought it might be helpful to write these things down. Maybe make a little series of it.

Here’s the thing though: I’m not a financial adviser or banker or accountant. I’m just a young person who has mostly worked in education and has only managed to make over $11 / hour in the last two year years. If you need serious financial counsel, I highly recommend you consult a professional. But if you just want to learn how to not be freaked out about money all the time, these tips might help.

Copy of Christmas in September

There’s a lot out there on how to make a little side money, and things that people will tell you (like turning off lights in the room you’re not in) to pinch pennies and legit – those things are great and I definitely recommend that you do them.

But there’s this other piece that people don’t know about, I think: how to not feel afraid when it’s time to pay the rent; how to purchase groceries in a way to make sense; and how to still be able to go out with your friends everyone once in a while.

d and j

I’ll be real honest: its taken me almost six months to write this because the topic of money stresses me out so much. So we’re in this fear together. Let’s start with the real game-changer: actually making a budget.

What’s a budget?

A budget is a detailed list of expected income / expenses. Your income and expenses should match. Start by listing every expense you can think of. For me this looks something like this:

Rent
Utilities
Cable & Internet
Credit Card
Medical
Gas
Food
Fun
Fun food
School Book Money
Misc.

Note: You always want to have a “misc” category – that’s where things like birthday presents come from.

Then, add in the “fixed” rates. So let’s say we have $1000 to work with (because that’s easier). Fill-in what you know isn’t going to change:

Rent: $400
Utilities
Cable & Internet: $80
Credit Card: $25
Medical
Gas
Food
Fun
Fun food
School Book Money: $10 (I know I’ll need X amount of money each semester, so I set a small amount aside each month)
Misc.

That’s $515, so you have $485 left over. Next, overestimate each of your monthly bills.

Rent: $400
Utilities: $50
Cable & Internet: $80
Credit Card: $25 (minimum payment)
Medical: $50
Gas
Food
Fun
Fun food
School Book Money: $10
Misc.

Notice the things that aren’t bills. Those are the things you can flex and challenge yourself to bring down.

So now, we’re at $615, meaning we have $385 leftover. I typically do gas before food, because gas gets me to the job that lets me buy the food. I also have a lengthy commute. If you don’t, or if you have a family to feed, you might need to do food first. Estimate how much you think you spend each month on those things:

Rent: $400
Utilities: $50
Cable & Internet: $80
Credit Card: $25 (minimum payment)
Medical: $50
Gas: $60
Food: $100
Fun
Fun food
School Book Money: $10
Misc.

So now we’re at $775, meaning we have $225 leftover. So, that looks like a lot of money to have fun with. Except we’ve only listed expenses. We haven’t listed savings. Month-to-month, my Fun, Fun food, and Misc category change.

There are seven birthdays in the first two weeks of August, so July has a pretty big Misc. section, but Fun as like, $10 in it because I spend so much time just being outside (which is free).

You can do this two ways: you can decide you’re going to save a specific amount and the remainder goes to fun, or you can decide you’re going to spend a specific amount and the remainder goes to savings.

Giving you the option is really counter to what literally everyone says about money, including my dad who taught me how to make a budget.

What I’ve learned over the years, though, is that you will never stick to a budget that isn’t honest. For most of my life, my Fun Food category was four times the size of my actual Food category because I hated cooking. It didn’t feel “grown up” to have things arranged that way, but it did keep me in check.

Those are the basics. What do you think? What about this is scary or feels good or is both at the same time?

A. Rose (1)

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