Okay, real talk time. I hate math. Well, okay, not all math. But the important stuff? Balancing columns, spreadsheets, and all that? Kind of makes me want to cry. Unfortunately (but realistically), one of the most important parts of being a responsible twentysomething is making sure you have enough money to…well, live. But how do you map out a weekly budget when just the idea of delving into your personal finances makes you break out in hives?
Never fear—I braved my own budgeting aversions to compile a list of things to keep in mind as you map out your spending plans. You can do it!
**10 Tips and Tricks to Budget Your Life**
1. Use the right tools. Mental math may have been all the rage in elementary school, but it simply won’t cut it when it comes to complicated finances. Whether you use Excel or meticulously chart out color-coded gains and losses by hand, do what you have to do to make sure that your records are accurate for your own peace of mind.
2. Know what you make. Break out that pay stub and check out your take-home salary—after taxes. Depending on how your job distributes paychecks, you may get paid twice monthly, all at once at the end of the month, or at another designated time. Know when that money comes in, and determine whether you’ll have to make a paycheck stretch across just a couple of weeks or the entire month.
3. Factor in fixed costs. Most people remember the big ones like rent, any utilities (gas and electric, heat and hot water if they’re not included in your rent), and cable/Internet. But don’t forget the other payments you have to make on a monthly basis! If you commute to your job, you might have subway or bus fare. Got any loans, student or otherwise? How about car insurance? Gassing up that car? If you have a credit card, that bill will recur every month. And that pesky cell phone bill can’t be ignored.
4. Nourish yourself. You’ve gotta eat, and if you’re like most SKC readers, you’re not going to want to live on blue-box mac ‘n’ cheese and ramen. If you have certain dietary needs or restrictions, want to buy local or organic, or just don’t want to compromise on the brands you like, make sure you’re honest about budgeting more of your take-home pay toward your grocery bills.
5. Don’t forget about the miscellany. Factor in those non-grocery expenses, too—paper towels, toilet paper, cleaning supplies, makeup, hair care supplies—those trips to the pharmacy should get a column on your spreadsheet as well.
6. List your “extras.” Now that you’ve got the necessities down, think about the other places your money goes. Do you belong to a gym? Subscribe to any magazines? Are you a Netflix addict? If your available funds are trending toward zero, it might be time to think about where you could give a little. Could you survive without cable TV? Are there running paths or parks nearby where you could work out, rather than paying a fitness center membership?
7. Have a savings account. I can’t stress this one strongly enough—stuff happens, and if you find yourself out of a job, having to replace a laptop or other expensive item, or saddled with unexpected medical expenses, having money to fall back on is invaluable. Most financial advisers will tell you to have three to six months of living expenses stored away, just in case. Set up an automatic transfer to your savings from the checking account where your salary goes, if you know you’ll forget. Or, if your company has a 401(k) program (and, even better, if they’ll match all or part of your contribution), become a part of it! Retirement might seem like it’s eons away, but having that money automatically siphoned away will make sure you’re putting at least some funds in reserve.
8. Take a look at your “fun money”! Hopefully, at the end of all that calculating, you’ll wind up with a small amount of leftover funding. That’s the cash you have to play with each week or month, depending on your budget—what you can use for going to the movies, restaurant outings, or that fantastic pair of shoes you simply need to have.
9. Be a good analyst. It might be helpful to have a couple of weeks or a month where you specifically don’t think about working within a budget. Then, at the end of that time, look back over your bank statements and see where your money went. If you notice any glaring imbalances, you’ll know where you can (or need to) cut back in order to save more.
10. If at first you don’t succeed… Don’t panic. Budgeting is something that takes time to learn, and time to master. It’s also not a perfect system, since costs like fuel, credit card payments, and groceries can fluctuate from month to month. Some weeks you might have a friend in from out of town, or a wedding to attend, or a big trip planned—and those expenses are okay. But knowing that they’re coming up will let you plan ahead and adjust your spending in the weeks before and after—be diligent about brown-bagging it to work or passing on that every-Monday manicure to make up for your extra expenditures.
(Major thanks go to fellow twentysomething bloggers Stephanie, Lindsay, Justine, Madison, Erin, and Kathryn for their input and personal budgeting tips!)
Tara Powers was an English major who stayed as far away from the business school building as she could during her undergrad years. She now lives, works, and saves in New York City, and also blogs about cooking and eating on a budget at Chip Chip Hooray.