Today I’m really excited because this is the first post in my budgeting series! This is a lifestyle blog after all and a huge part of life (whether we like it or not) is money. I actually truly enjoy budgeting. I think it’s because I’m kind of a control freak so having total control over my money makes me feel relaxed. That may sound weird but it’s really not I promise!
Which scenario sounds better? Scenario 1: You go grab dinner, pick up a new magazine at Target and maybe a new shirt, get a coffee afterwards and then agree to go get a manicure with your friend over the weekend. You get home and have a sick feeling in your stomach after you realize how quickly and easily you spent money without even thinking about it, and honestly can’t even bring yourself to look at your bank account. You just kind of ignore it and figure you’ll deal with it later after you’re done feeling guilty about the purchases you made.
Scenario 2: You make dinner at home or go out, your choice. You get a new magazine at Target and maybe a new shirt, get a coffee afterwards (or make one at home, again your choice), and agree to get a manicure with your friend over the weekend. You go home, read your magazine and relax, and then go to bed guilt free but super excited to wear your new shirt when you meet your friend for coffee.
I pick scenario 2! I’ll always pick scenario 2! Guys, YOU can always have scenario 2. I used the shopping as an example because it’s something we can all relate to but obviously this is a budget and not a shopping spree so you’re not going to go shopping and spending money every single day, but you got the point. I have scenario 2 pretty regularly and it’s much more simple than some may think. This budgeting series is going to be a 4 part installment (there will possibly be more) and let’s just remember it’s the road to the awesome scenario 2. I know a lot of people who live in scenario 1 and I’ve been there too. It’s not fun. So when I say budgeting is something I enjoy, it’s because I enjoy living scenario 2 and budgeting makes it happen.
A few things before we get into this: I am calling this the twenty something budget, but this can definitely be something that works for any person on any salary! Another thing for this budget is that I get paid once a month at my job so all of my budgeting is monthly. If you are paid every 2 weeks or even every week, don’t worry, the month budget still works! There are just a few tweaks to make, which we will get into in a later post.
Okay you’re all ready to start and I’ve convinced you all that budgeting is awesome! So let’s get started.
Step 1: We need a couple supplies. I’ve listed them for you below.
- A notebook to keep all your budgeting
- A pen or pencil
- A file folder (optional for now but essential once we get later into the series)
That’s all! Easy enough and I bet you have the 2 necessities lying around your house.
Step 2: Be Honest
This is a very important part of your budget. You need to be honest with yourself about how much you make and how much you spend. For the sake of this post in the series we are going to assume you are budgeting for yourself. That means we are only focusing on your income and your expenses. A post later in the series will be about budgeting with a partner. Remember this budget is something by yourself and for yourself. It’s to make you be in control of your finances and be free enough in your money to not feel guilty or nervous about purchases.
Step 3: Figure out your goal
Before we get into numbers you are going to need to find out what your goal is. Are you wanting to pay off debt? Are you wanting to stock your savings account? Is there a specific vacation you’re wanting to go on and want to afford it? Think about what you’re wanting to accomplish with your budget. Write it down and keep it in mind! It can change as the months go on a well.
I started my budget at the end of September 2014 and wanted to budget for the month of October. I started my first job out of college in August and my first adult paycheck came in September. I knew that I didn’t want to just blow through my money. I didn’t have any big item I was wanting to purchase or any vacations in the near future but I just knew I wanted to start out my future as an adult with an adult salary responsibly. I had waitressed for 4 years in college and never had a great budget. So my goal was to #1 learn to be responsible with my money and #2 start a savings account. Those were my goals, but they are different for each individual!
In the year since I’ve started my budget I have changed my budgeting goals with different things that pop up in life. For a few months it was all about my dog. I knew I wanted to buy her, afford the pet deposit, and all the necessities that you need when you buy a dog. (Read about that post here.) My current goals are to have 4 months of living expenses in my savings account (I currently have one month stored away. Woo hoo!) and to save for a family vacation I’ll be going on in January. My boyfriend Shane has the goals of paying off his credit card and car. That will be a post later down the road about budgeting with another person in the household and how to budget when there are 2 different goals. It’s totally possible to do, btw.
Step 4: Count Expenses
Get your notebook and pen and write down what you take home in a month. This is after taxes and what is actually deposited into your bank account or handed to you in a check. If you don’t have a regular paycheck or set salary, write down a good estimate of what you’ll make for the month (or every 2 weeks). I always say estimate lower than you expect because then you’re either right when you are paid or you’re pleasantly surprised.
Example of this: I was a waitress throughout college. If I thought I could probably make $300 for that week I never actually counted on $300. I would budget for $200 a week. That way if I had a slow night, lost a few hours, or just didn’t make as much I wouldn’t be disappointed or stressed because I had budgeted for $300. Instead if I made more than $200 for the week I’d always be excited because I had more to work with!
After you have written out how much you make in a month it’s time to move onto your expenses. Write down all your expenses in a month and how much each expense is. I always start by writing down my fixed expenses for the month. That means that those expenses won’t change. Some examples of that would be your rent, your cable bill, your car insurance, etc.
After I’ve written down all the fixed expenses I write down my adjustable expenses. These are things that can change from month to month. Examples of these would be gas money, grocery money, and puppy supplies. Gas is an adjustable expense month to month for me, because I travel for work. This month I will be out of town for 2 weeks in a company car which means I only have to budget for enough gas for my personal car for 2 weeks. I also may know that I have a potluck at work during a certain month so I’ll add a bit more to the grocery budget for that month.
This picture is an example of what a budget for myself would look like with the fixed and adjustable expenses. Of course then you want to add in all of numbers. 🙂
These are the first 4 steps I want to give to you all! You’re probably wondering where the rest of the budget is, but the fixed and adjustable expenses are the most important parts of the budget. Those are the necessities for living. Next week we will get into what I call “Free spending” and your savings account. Free spending is for all the fun things like coffee, magazines, and manicures with friends.
Everyone’s financial situation is different but there is one thing we can all have in common, which is that we shouldn’t be scared of finances and money. Being in control of my spending and my budget is an amazing feeling and a feeling I promise everyone can have. We’ll talk about choices, debt, and mistakes I’ve made in budgeting and what to do when you make mistakes as well. Please subscribe to A Glittered Life and be prepared for next weeks post in the budgeting series! Please let me know if you have any questions so far, and thank you for reading! We’ll accomplish financial freedom together.