If you don’t have a budget, you have NO idea what money is coming and going and where you’re spending it. This sounds obvious, doesn’t it?
Obvious, yes, but, why then do the majority of people I know not have a budget? I have not always had one and figured that since I was ‘making this work’ it wasn’t necessary. However, the more serious I became about earning and spending my money wisely, the more I found that sitting down and creating a budget was crucial to being financially responsible in the future.
So, how do you make one and stick to it? Let’s get into it.
I have tried several different apps, websites, and good old fashioned spread sheets to try to track my money. There are apps, like Mint, where you link your bank account and it keeps track of where your money is coming and going to, and sorts it all into categories (i.e. groceries, gas, rent, etc).
There are some apps, like You Need A Budget, where it is a paid service, and therefore a little more robust than a free app like Mint. It seems a little silly to me to pay money for a service that you are using to save money though? So, I have been on the search for something that fits my needs, which is free.
As of recently, I have been using Every Dollar (there is an app and a great desktop version) which has the same basic idea as the rest of the budgeting apps and websites, but I just prefer the look and functionality of this one over the others.
How to Use
At the end of each month, I put together my budget for the upcoming month. You enter all your income and expenses and manually keep track of these things (you can pay for the premium version which links up to your bank account and automatically keeps track).
One of my favorite features is that you can make ‘funds’ which means if you have a big upcoming expense like car maintenance, you can keep track of how much money you’ll need to put away each month to make sure you have enough when you take it to the mechanic and you can receive reminders to do so.
This function also works well for saving money for other reasons like, going on a trip, putting away money for retirement, or stashing away money for your emergency fund (something we will definitely have to talk about in the future)!
why is this important
Listen, Lord knows I can go to the grocery store and buy a whole damn cheese wheel if I’m in that kinda mood. And before you know it, I’m $150 deep in a cart full of groceries and one-third of them are not really things I NEED.
The first few months of budgeting consisted of me figuring out a realistic budget for certain areas of my life. This means I budgeted $250 for groceries initially and found this wasn’t really realistic, so I bumped it up to something that suited me better, but still kept me on track to only spend money on the groceries I needed, with SOME cheese money, and putting that extra money toward other budget items.
This way, when I go to the grocery store at the end of the month and see I only have $80 left in my grocery budget, I spend that money wisely and get like, dinner food instead of ice cream, ya know?
What else can you use it for?
Well, just about everything money related. You should be keeping track of how much money you have available to save. If you want to save for a house, or a new car, or an engagement ring, or a trip to Europe…that money has to come from somewhere. Where people get into trouble and have to rely on their credit cards is when they don’t budget correctly because they have no clue how much money they’ll need to be putting away every month. I think many of us are just kinda…saving whatever money we can manage and hoping that it will cover what we need it to.
I know plenty of millennials (and people of every age) who don’t know, or don’t have the discipline to create and stick to a budget. I have some news for ya though…NO ONE is going to sort your money out except for you! If you plan on just “worrying about retirement later” you are in for some tough times when later happens. Money will not just fall from the heavens and magically be enough to cover your expenses and let you live comfortably as well. You are going to have to buck up and be active in your plan to save and spend your hard-earned money wisely.
My argument is that we (you AND me) need to take a front seat in where our money is going. You literally have control over it and it cannot get spent without you giving the ‘okay,’ first. Take control, have a plan, and take an active role in your finances by creating a budget.
Not next month, not next week, or next Monday, do it now!
This week’s resource: Her Money, Episode 54, “Stop Being a Broke Millennial with Erin Lowry”
Current total debt: $143.98