How to: Budget Your Money

I didn't realize so many of you would resonate with me when it came to the art of adulting. I know I never really dive into tech-y topics here but let's be real, it should be addressed more as we can all benefit from financial responsibility. As promised, here's another post on tips in regards to just that. My most asked question is typically "how do you budget?" so I'm gonna try my best to break it down for you without sounding like the total maniac that I probably am.

1. Measure Your Income

  • Do you truly know how much money you've touched in a day, week, month, or even a year? I know some of us probably don't notice it due to a lot of necessary and unnecessary spending, but a good start for me is to measure your guaranteed income which would, in conclusion, be the total of your fixed budget. This number generally remains the same +/- a few dollars whether you're measuring weekly or monthly. I tend to stick to monthly budgeting as it's easier for me to narrow down repeating tasks.

2. Make a List

  • Being organized is probably one of my biggest specialties. This is where I would consider making a list of your most important financial obligations, i.e., your rent, car note, etc., and don't forget the COSTS. This will help when it comes to measuring your income as you'll have a sense of how much money you need to cover these costs versus how much money you're bringing in. Do not let your expenses outweigh your budget.

3. Think Before you Buy

  • As I've grown, my taste and finances have grown too. I try to tell myself that just because I can AFFORD it, does not equivalent to the fact that I may NEED it. I do this, especially when it comes to little luxuries, i.e., designer branded goods, fine dining, vacation. I set levels of importance and always make sure my bills are paid first and foremost before I cater to any unnecessary spending.
  • I don't like to purchase higher price point items unless I know for sure I can purchase them numerous times. I understand the concept of money comes and goes, but the idea of spending my last dollar on something drives my anxiety through the roof. I would not recommend purchasing unnecessary items that you cannot afford at least triple their value. 
4. Open Multiple Checking Accounts
  • If I'm unable to see all of my money in ONE place, I'm less likely to spend it. When it comes to budgeting out my future payments, I like to transfer my money from one place to another, so I don't accidentally spend it or think I have spare money to use. There's no harm in having two debit accounts. Have a main checking for your everyday deposits and bill spending, and have another that can be used as a secondary spending or for future necessities (without the unnecessary fees of a savings account when it comes to withdrawals). 
5. Checks and Balances
  • Or what I may call save vs. spend. Don't be in a rush to spend money you just got! In reference to making a list, I like to budget months in advance whenever possible. I wasn't always able to do this as it takes time and consistent payments, but since I'm unable to predict the future, I take advantage of the present. If I'm able to pay a reoccurring bill twice, I will, but the key is not all at once. I set the money aside in order to pay it for the next month. I'm certain you're unable to pay your January bills with your January paycheck because chances are they were already due right? So budget it for next month! Before you know it, you're budgeting months down the line, and it feels good knowing you're covered.

To sum this up, don't overthink. Also, don't neglect yourself. It may seem like I'm solely focused on saving my money for routine bills, but you can have the same mindset when it comes to fulfilling your guilty pleasures. Once you're at a point of constant stability, treat yourself. If you have any other questions, don't hesitate to reach out to me via my socials!