I’m not going to lie. For most of my life, my mom made really good money. I went to private school since I was 4. So there was never a struggle for the necessities. I got to go on all the field trips. I was never left wanting. My mom busted her butt to provide for us, and she thrived in her job. But if there is one thing I could change, it would be the mental view I have of money.
I’m not trying to romanticize the idea of “the struggle,” but I do wish I had more appreciation for the value of a dollar. I’ve adjusted now, for the most part. But I saw a tweet that rang true to my core. “My mother really introduced me to a lifestyle that she no longer intends to fund. What kinda s*** is this??”
And if that ain’t the truth.
The first time I had to sit down and budget was a foreign feeling to me. Sticking to my budget was a struggle. This isn’t some “woe is me” story. It’s just the life lesson that I had to learn later than some and earlier than others.
It wasn’t until I moved out that I had to worry about money, which I feel is most people. I might be wrong. What do I know? I’m still figuring out my life as I write this, but I’m putting in the time and the work to better my ability to stay financially responsible. And at the end of the day, that’s all you can ask of yourself. So I want to make sure that, although obvious to others, those who need a much-needed break down of financials get it.
My first ever budget is laughable. It had something ridiculous, like $150 a week for food. That’s just plain stupid. Or that I had to have Netflix, Hulu, HBO, and Spotify all at once. I was lucky to have one or 2 of them, but all of them? Talk about greedy. I remember the absolute shaming I gave myself in the mirror the first time I went to bed without dinner because I was reckless with my money. Or the nights where I would lie to myself about not being hungry. To no one’s fault but my own. I needed that new pair of shoes, or I had to go out with friends and spend $20+ at a restaurant (FOMO is real, and it’s a pain in my butt). Who was I trying to impress? I was constantly stressing whether I had enough money to last me until my next paycheck. All unnecessary stress. It wasn’t until I broke down all my unnecessary spending and started to stick to my budget that life seemed to get easier to manage.
My biggest misconception of budgeting was that it would be a way for me to save money. It would be my way to enforce strict spending habits, but in reality, it didn’t have that effect. Not at first. Budgeting isn’t going to stop you from bad spending habits, but it will show you where you are wasting your money. Hindsight is 20/20, and so, budgeting is just that; looking back and improving on where you messed up. It is easy to say, “Hey, you shouldn’t spend $5 on a cup of coffee every morning,” but I mean, I kind of need my Iced Caramel Latte. So, where is the line between necessity and want? Well, there are a few things that we need to break down before we can even consider budgeting.
How often does your job pay you? The norm is every two weeks. Some places do every week, twice a month, or even once a month. Income can differentiate between people. That’s a given, but let’s figure out how much you bring home in a month.
An expense that is time-specific and is a set amount. (i.e., Car insurance, car payment, rent)
basically everything else that isn’t a fixed expense. (The Mcdouble you bought on your way home from work because you don’t want to cook dinner)
How much should you be saving, and how much should you have saved? The 50/30/20 Rule is a good rule of thumb to follow when it comes to saving. 50% of your income should be spent on your necessities. 30% should be spent on your wants, and 20% should be put into your savings.
This falls under savings, but it seemed important enough to have its own section. Why are you saving? Is there something you want? Or maybe a vacation you have always dreamed of taking? Either way, determine what your short-term goal is and what your long-term dreams are. What steps and sacrifices do you need to make to get where you want to go?
Now that we know what budgeting is, the big question is, why is it important? Proper budgeting will help relieve the stress that is associated with finances. Living paycheck to paycheck is a grind. There are times when you know you have a significant expense coming, and you can prepare for it like rent. But sometimes life happens, and you blow a tire. You check your bank account, and there is only $30 in there. (We’ve all been there). So, budgeting helps us get to a point where we are secure in our financials.
If you follow the game plan you laid out, then you can reach your goals. Whatever they may be.
What have you had to cut out of your life to stay on budget?