Disclaimer: I am not good with money. I don’t even really have any. But I’m trying.
Everyone is entitled to a few bad decisions in life. I’ve managed to keep most of mine to one category. Pricey out-of-state school, eating out for most meals, living on credit…yeah that about sums it up. I used to say “Let future Amanda worry about that.” Future Amanda is not pleased.
Budgeting is one of the most difficult things I’ve ever done, because it starts with facing the mistakes I’ve made. The whole process can be overwhelming and let’s be honest, we’re all looking for an excuse not to do it. I’m giving this plan a shot. Success story testimonial to come much later.
1. Write it down
This is the worst part by far. Pick one credit or debit card to use for a month and then write down every penny you spent so you can see where the real problems lie. You’ll probably realize you’re spending a lot more than you thought. It’s terrifying, but necessary.
2. Start with essentials
What are the things that if you stopped paying people would come after you? List all of your bills here: phone, rent, loans, credit cards (we’re not talking magazine subscriptions or monthly pedicures).
3. Bank 1/2 of what’s left
This is the key, and it’s where we’re most likely to bend the rules and completely screw our budgets. This is where I have to think really hard of future Amanda and how miserable she’ll be if I spend all of our money now and she can’t afford food later. If we stick to this the rest is cake, trust me.
4. Take the rest in cash
Withdraw what’s left in cash. This is all that we’re allowed to spend for the month (or week, or half month, depending on how you’re paid). It’s a lot harder to mindlessly order a $4 latte from Starbucks on your way to work when you have to see the money disappear from your wallet, but this way you can still splurge on the drink or your Spotify music subscription–you just have to spend less somewhere else. I feel richer already!
If you’re anything like me, you may not exactly have anything left over after you pay your bills. Lookout for my upcoming post on ways to make some extra cash to supplement your check.
For everything money-related my favorite resource is Maine native David Weliver’s moneyunder30.com. Check it out for tips on paying off your student loans, building credit, and even doing your taxes.
How do you stick to your budget?
What are the extras you’ll always leave room for?