Budgets Made Easy

At the young age of 13 I got my first ever job as a babysitter... for my brother. And ever since that day, if I wanted to buy something nonessential, I had to pay for it. So I saved away all of my birthday money, babysitting money, and dog sitting money. And I probably spent that money on clothes (I have always loved clothes).

Obviously I grew up and got a real job... as an ice cream scooper. I was a lifeguard, a tutor, and a sales associate at different periods throughout high school and college. And I never really kept a budget. I would put some money into savings and always had a general idea of how much money was in my account so I wouldn't over spend.

Now, I have a real, big - girl job. And I do make more money than I ever did as an ice cream scooper. But I also pay a lot more bills. So I decided it was time to make a budget. If I want to pay a little extra money for groceries from whole foods, or a cappuccino, or yoga, then I have to keep track of my money and limit spending where I can.

I googled how to make a budget and there were graphs and pie charts involved. Not my thing.

I asked my mom for her budget and got a three page excel spread sheet. There had to be a better way. I don't want to collect recipes in a shoe box and then spend 3 hours on a Saturday updating my spread sheet (no offense Mom, love ya).

So I downloaded a budgeting app. I have the app Goodbudget. This app is not hooked up to my bank account so I have to input everything manually. But its super easy. Just think about it for a sec. I always have my phone in my hand or my pocket. So overtime I swipe my card, I open up my app and plug in whatever I just paid for. It takes two seconds.

So how do you divide your monthly, or biweekly income into a budget?

The Goodbudget app has two categories: short term saving and annual savings.

Short Term Savings

First make categories for all of the bills you have to pay: Rent, phone bill, utilities, parking, gym, car insurance, college loans, etc. If the bills change from month to month, such as utilities, I like to plan for the higher amount just incase.

Next make categories for necessities: gas, groceries. To figure out these amounts just estimate what you spend in two weeks on these things.

Then set a limit on the money spent on nonessential things: eating out, clothes shopping for me that is about 20% of my biweekly income.

Lastly, I like to make a credit card section. This section doesn't receive any money when I get a paycheck, but every time I use my credit card I transfer money from another category (like gas, or eating out) into this credit card category so I know that I can pay my credit card bill. This takes away the temptation of hitting your high, unrealistic credit limit.

Annual Savings

So now that you have figured out your short term savings, it's time to plan for the future. Based on the bills that I pay and general spending that I do, I am able to put 25% of my income into "savings". I have been told that 30% is a good amount, but honestly, its just based on what you can afford.

I have a few categories in my annual savings.

I started with a "Do Not Touch" category. The money in here came from the money I saved in high school and college. Basically this is my super long term savings category. I do not know what I will spend it on, but I am sure in the future there will be something important that it can go toward. I put money into this account whenever I end up with some extra cash (basically just on my birthday)

Then I created a medical category. The amount in this category is the amount of my health insurance deductible in case of emergency. I don't add money to this category, it just stays at that one amount and hopefully I won't have to use it.

So now that the really important things are handled, you can have a little more fun.

First create general savings. This account can take into account random expenses like new glasses, or Christmas Presents.

Then create some fun savings categories. You don't have to put a lot into this annual savings categories unless you know that you want to go on a three week vacation to Europe that will cost you three grand. Personally, I only have $200 in my "Trip to Europe" category because a) I can't afford to put a lot into this category and b) This trip probably won't happen for a long while.

But these fun categories are important, even if you won't be spending this money until a year or two from now. By setting a goal to put $50 or $100 into a trip or a car you create some motivation to save more and spend less.

So instead of using excel, formulas or graphs, use an app and make budgeting easy. It'll help you save time, effort and money.

#money #budget #shopping #bills