Let's talk budgeting! It's 2024 and the price of groceries and just living in general has gone up exponentially! I grew up in a very poor household, my first memory of worrying about finances was when I was in the third grade and it hasn't stopped yet. As I have grown older I have learned that a lot of people don't know how to budget their finances and, as a result, most of us are struggling. Here, I hope to teach you just a couple of different tips that have helped me to manage my budget so that I am able to pay my bills on time and still have a savings account.
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Step One: Write Down All Your Expenses
I want you to write down all of your expenses. Don't forget those pesky subscriptions that you probably have forgotten that you pay for. You can use Rocket Money for help finding those hidden subscriptions or expenses if you want. For those variable expenses, write down a rough estimate of what you spend. For example, groceries, and gas are variable expenses. I use a budget planner for tracking all of my expenses but this is not a requirement. You can use just an old notebook and it will accomplish the same thing!
This is the budget planner that I use:
Add all of your expenses together.
Step Two: Write Down Your Income
Next, I want you to write down your income. If you get paid bi-weekly or every 2 weeks, weekly, add up your income and write that down.
Step Three: Division
Now that you have your expenses and your income written down, divide your expenses in half if you get paid bi-weekly or every 2 weeks. If you get paid monthly, you can skip this step. This amount is how much out of each paycheck you should be setting aside for bills.
Step Four: Savings (optional)
This step can be skipped if you don't want to save money, or if you simply cannot afford to save money right now. I know that times are tough right now and not everybody is in a position to have savings right now. If you can save money, for most people, I would recommend no more than 10% of your after tax income. Multiply your income by .10, and that amount will be the amount of money that you are setting aside for savings each month. Add that in like an expense. Everything left over is what you are have left over for fun spending.
An Example:
Expenses: Income:
Rent: $1500 Paycheck#1: $2000
Electric: $100 Paycheck#2: $2000
Water: $50
Netflix: $20
Hulu: $10
Capital One: $70
Credit One: $40
Car Payment: $400
Car Insurance: $150
Groceries: $300
Gas: $100
Savings: ($4000 *.10) $400
Total: $3140
$4000 - $3140 = $860
$860/2 = $430
So the money that you would have left over for spending would be $860 or $430 per paycheck.
And that, my friends, is how I choose to budget my money! I hope that this helps and that those of you who are struggling to manage your finances gained some knowledge from this. I know that finances can be intimidating but we can all figure it out and having the knowledge of how these things work is going to take you far!
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