So since moving out and graduating college, I have to pay a lot of big bills including two giant student loans. So having a budget and sticking to it is severely needed or I will not be able to pay my bills or save up for unforeseen events in the future. These are the tips I live by when managing a budget.
1. Pay Yourself First
If you want to save anything, you need to first pay yourself. Make sure that when you start to create your budget that you first list the amount you want to save every month or every paycheck. This will ensure you can save up for when things go wrong and have wiggle room in the future.
2. Try to budget things 50/30/20
This is something I heard was a good thing to do and I aim to get towards this in the future, though right now I’m a ways from being close to that. Plan 50% for necessities like rent, debt, and other important bills you cannot avoid. 30% for lifestyle choices like movies, restaurants, etc. And lastly 20% for long term savings.
3. Set your budget and stick to it
I get shopping cravings a lot, and as fun as buying the newest gadget or newest makeup products from the latest release. You can’t allow yourself to give into the temptation. It’s like if you’re on a diet, you just have to decide you can’t allow yourself to have a double chocolate chip cookie.
4. Map out your budget for the year rather than a month
Doing a rough month to month budget is great but you can’t see every how they pay off each other. I did that to start with and followed the budget religiously but somehow with a wiggle room of several hundred I was constantly dealing with not enough money at the end of the month to pay for all the bills. But once I did the budget by doing the full year with everything set by due dates, I could see where things were going to be tight and where I needed to pick up more hours to cover where things. Plus I finally discovered where the flaw in the budget was because I could see why I kept going under. And the short/skinny of it is I wasn’t making enough and I was using up that wiggle room as time went on without realizing it.
5. Guess low for income
As I work one salary job that occasionally has commission and another job that is hourly. You have to always go with what the lowest paycheck is going to be. Anything more is savings or something you can use to treat yourself with. This will help you so you don’t get cut short as I was before.
6. Cash Allowance for Small Expenses
For my main job/salary job I work in downtown Minneapolis so I’m surrounded by restaurants to get food. And everyone goes out for lunch more or less. So I have to set myself a cash allowance which I also use for overall food allowance that’s not grocery shopping, as this helps stop me from over spending money on food. It also just makes you overall more consciousness of these small expenses.
What are some of your tips for managing a budget? I would love to hear them as i’m not an expert in this field by any means.