Figuring out how to manage your money is a big step in the How To Adult process but it doesn’t have to be difficult. There are a thousand and one pieces of advice about creating a budget but the most important thing to remember is that your budget needs to be unique to your own situation. So take everything with a grain of salt and don’t be afraid to talk to someone you trust about what to do (like a parent, mentor, professional..) We’ve worked over our family budget at least twice a year, so here are a few things I’ve learned in the process that I thought to share with you;

Use Banking Tools

Not every bank or credit union is going to have the same management tools, but I haven’t found one yet that doesn’t have some kind of budget helper. So poke around your online banking page and see what they have to offer you. Something I have found very helpful from our credit union is their Money Management page. It allows me to organize our spending by labeling the transactions for different categories. Then it shows me exactly what we have spent in each category and I can even compare it from month to month. No more keeping receipts and writing everything down, welcome to 2019.

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Have a Plan

When money isn’t tight it’s really easy to lose track of where everything is going. Next thing you know you’re spending hundreds and you can’t remember what it was for. A good rule of thumb is: if you can’t remember what you spent money on, whatever it was wasn’t really worth it. Having a good plan from the beginning allows you to still have wiggle room for the extras, but your spending is a much more conscious. This is where my mother-of-all spreadsheets comes in. There are so many good pages here (and honestly I haven’t used them all) but my favorite is the Family Budget page. We use it to look at an average monthly snapshot of all our cash flow. All of the formulas are done for you which makes it easy-peasy to use.

  • First add in your income. If you get paid twice a month, multiply it be two. Include all your sources of income here and when in doubt round down. It’s better to underestimate your earnings and overestimate your expenses.
  • Then add in your expenses. Like all of them. I start with the fixed things like rent, insurance, utilities, and car payments. Then look at the variable expenses; food, shopping, clothes. We are shooting for a realistic monthly average so looking at your bank statement here really helps. Don’t forget to think about those monthly subscriptions and memberships like Netflix and the gym.
  • Finally set some savings goals. We’ll talk more about this in a minute, point is you’re gonna want some cushion.

All these add up to show you the bottom line. There is even a ‘modified’ section to show you the what-if scenarios without messing up all your work.

Pay Yourself First

The best way to make building a savings stash a priority in your budget is to pay that first! If you wait until the end of the month to see what’s left, there won’t be anything. There are so many good reasons to have a savings stash but here are my top two:

Unexpected bills can break a budget and put you on the road to disaster. Life can throw huge expenses at you that sometimes you can’t plan for. The easiest way to be prepared is to have an emergency savings. This is money that doesn’t have a purpose yet. We’ve had both cars break down, my husband’s been without a job, and I’ve had two surgeries in the last 9 months alone. But we are still debt free thanks to our emergency savings stash. This is a safety cushion that has given us financial and emotional security in tough times. We add at least 10% of our income to this savings account just because it has been so valuable lately. That doesn’t have to be your plan, but whatever you do commit to this stash needs to be able to make a difference when you need it.

The other savings stash I recommend is goal oriented. Pick something you really want to spend money on and make it happen! Choosing to skip a checkout isle candy bar is much easier if you know that’s another dollar closer to your goal. Make it something really good and juicy so it will hold your interest, then figure out how much you need to save to get it. I would recommend keeping track as you go. I’ve got our goals drawn out on a whiteboard that we see everyday. When we add to this stash I add it to the board, this way we can see exactly how far we’ve come and how far we have to go.

Spending Less

Figure out what the variable expenses are. If you are looking for places to cut your spending, this is it. These are the expenses that you have the most control over, they aren’t based on a contract or they aren’t necessary for you to live everyday. When things are tight these are the things that should be cut first. You could spend less on clothes, buy cheaper groceries, stop eating out, or even cut your cable. But hey, you can always change it up again if you need to. If you are looking to strip your spending even more, look into your fixed bills too. Don’t be afraid to ask questions-the worse they could do is say no. So renegotiate your cell contract!

Creating a budget is all about maximizing your income and making conscious choices about your spending. It may seem difficult but it is really worth the effort!

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