Budgeting is a very crucial part of your finances that will either break you or make you survive into another month. I have a very unpopular belief that says, if we take away the inflation issue, take away the wage issue and wage theft problem in America. I do believe that a lot of people are just simply bad with money.
And I’m no bank-level financial advisor or anything. I’ve been able to sustain all of my expenses without a hitch. I’ve paid my monthly loans on time, actually, pretty well in advance we’ll say because as soon as I see bills come up infront of me, I want them out of my face as soon as possible.
I always advise people when they’re out on their own and that’s to watch their numbers. Always total the amount you’ll be paid by the month, if it’s fixed income. Then, take all of the expenses you’re paying for by the month and total them up. Then, subtract the amount of your expenses from the total earning and you’ll figure how much you’ve got left to work with and how you’ll spend it if you want to. Saving is also key.
I’m not here to tell you what to do with your money. People get vehemently defensive when you point out the flaws of their spending habits, always treating it as a control issue when you’re just simply finding what’s wrong with it as they complain all of the time as to why they’re broke.
But all I will say in regards to that, is that, you really need to weigh your needs from your wants. Impulsivity is a bad driver in how it ruins our finances. I’ve done things where I’d be in a store and I’d take something I thought I’d really want to have and I’d carry it around for a while. Eventually over time, the feeling of wanting that thing, washes away because I know that it is simply an impulse issue.
I do get concerned when people lay out their budget plans. They spend triple the amount of groceries for just themselves. They actually even make budgets for bad money sinks like weed and alcohol. They never save anything, it’s always spending by the paycheck. You’ll never know if something will come up that’ll require a specific amount of money and you’ll find yourself in a tough situation where you are having to decide whether you want the lights on for another month or your car tire needs to be replaced because you’ve neglected it for so long that the threads are worn.
Just a minor addition, if you are particularly bad with impulse spending, follow this approach but use separate accounts to help manage the budget - i.e. on payday put the amount of fixed expenses into an account and don’t touch it for anything other than these expenses (setting up direct debits for your expenses can make this run on auto pilot). Keep separate accounts for your variable expenses, your “fun money” and of course our savings as well (and only use your savings for a planned goal or emergency). It sounds overkill but it can really help you control where your funds go!
My second account is where my pay goes, and importantly the only way to spend that money is move it first. Laziness prevents me overspending a lot.
This helped a ton for me, I opened a second savings account for travel/vacation savings and I have thought about opening another checking to separate “fun” money from expenses money.
Some banks make it really easy, where you can freely create sub-accounts for each bucket of money, but it seems like a majority make you apply for each account. In my experience, the application gets instantly approved, but it makes it seem harder and scarier than it really should be.