Whew NYC was amazing, obviously. We ate our body weight in cheesecake, got to see Hamilton in a magical turn of random amazing events (that there were randomly two tix for a previously sold out show one of the nights we were there, and we had the money to buy them immediately), and didn’t use airline miles because we paid cash for the whole thing.
But the best part was that we went with not a care in the world and we came home without a care in the world. Because we used a (drumroll) budget.
Though budgets are easy to make, they can be tricky to live by and can seem overwhelming on first pass. So here’s a free, cheap and easy way to make a budget! Works every time!
- Get two pieces of paper. On the first, write your hopes, plans, and dreams. If your big dream is to be debt free, you can write that, but don’t stop there. Think about when you were five, ten, fifteen. What did you want to do when you grew up? End world hunger? Save the whales? Be an astronaut, live in NYC, start a school, whatever. Write it down! Start asking yourself, what would you do with a million bucks? Those dreams are not unattainable. In fact it’s those dreams that are about to drive you into a new reality. WRITE THEM DOWN and stick em on the fridge. Step one, done.
- Ask how much per month you want to save and how much you want to give. That comes first. If you’re a ten percent giver, figure out that number and write it down. Another 10-20% should be saved (at least). Bam! Your first two line items, done.
- Figure out where your money typically goes. I printed off three months of bank statements and got my highlighters out. Painstakingly highlight with different colors all the major stuff (groceries, restaurants/coffee, rent/mortgage, utilities, child support, random shopping/amazon) etc. You’ll immediately see some trends.
- Think about other expenses that don’t show up on your bank statements. Anything you pay cash for? Jot it down.
- Categorize your spending. On the second page, make a list of all expenses in one column and in a second column, write what you typically spend per month per item (three mos of data will give you a more typical overview than one month will).
- Write your monthly income on top of the second column, and begin subtracting all those numbers. You want to have money left over 🙂 You probably won’t. That’s okay. That’s why we’re budgeting.
- Take a deep breath. The fun is about to begin. You might want to stop and rest just from the shock. If you’re doing this in real time, I bet you feel super guilty for how you’ve been spending. Been there! Can you see how your dreams really are possible if you just stopped spending on dumb stuff and started dumping money towards your dreams!?
- Judge your categories. If you’re spending $1300 a month on food, ask yourself if you’d rather do that, or would you rather start that school, feed that family, coach that soccer team? If you can squeeze a hundred bucks out of your food budget, do it. If you can cut your food budget in half, do it! Realize here, food and groceries are two different animals. Don’t lump restaurants into your food category. That’s separate. Just by distinguishing what you spend on restaurants vs grocery store can help you retire like twenty years early. For the cost of two average restaurant meals, I can feed my family for an entire week, OR TWO.
- Judge every category. Can you tighten any of them? (yes, you can. lol.) For instance, could you live without internet? (do you have a local library? If so, then yes you can). Can you downsize your smart phone? Do you NEED all that data? Do you need that many cat videos? Or would that money be better spent feeding hungry kids? Who do you want to be? The lady who watches cat videos, or the lady who ditched her cell phone so she could impact the lives of kids?
Now the even FUNNER part! 🙂 Judging yourself and making necessary changes.
- How often do you shop for silly things that aren’t important? Take note! If you spend $300/month at Target for things you can’t remember, maybe acknowledge you like to spend on silly things, give yourself a $150 Target budget and commit that other $150 to savings or giving. If you’re super badass, cut out the whole Target shenanigan.
- Check your habits. If you love Starbucks but realize your four weekly lattes are hitting almost $100/month, cut it to one a week (or one a month) and make your own hip drinks at home. There’s plenty of coffee snobbery to be had in your own kitchen. Get some artisan beans, a fancy press, and some new fancy coffee friends to tell you how fancy you are. Put the rest in retirement or give it away.
- If restaurants are a sore spot for you, OPEN YOUR OWN, of sorts, in your own house! Splurge a little on awesome food, and then invite a million people to come eat it! Many, almost most of our meals, are made for and with other people! We have the coolest dinners and it’s SO MUCH MORE FUN than a restaurant with all that salt and MSG etc. You get to know your neighbors and friends way better and you get to learn to cook.
- I learned from the Frugalwoods to swap your breakfast for oatmeal. Wahoo! Some raw oats and milk with cinnamon and berries and honey is on point for breakfast and it costs something like .001 cent per serving.
Once you get your budget weeded out, you’ll start finding extra moolah everywhere. If you still don’t have enough to get by, consider adding another job. If you’re really in dire straits, and I completely acknowledge that many people are living in circumstances where a budget like this just isn’t possible, seek wise counsel. Find a financial counselor who can help you access resources while you wade through all this.
Have fun. Budgeting means giving yourself permission to spend the money you’ve earned. Keep your dreams at the forefront and consider the cost of every expense. Is running the A/C to the tune of $200/mo worth not being able to feed hungry kids or fly to Europe for a month long trip? If yes, run it. But if no, then don’t!
It’s your money!