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.
Now if I could just actually stick to a budget… I get spendy sometimes and my budget doesn’t like it.
I’m going to reply to your comment… But check out the philosophy of You Need A Budget. One of their keystones is roll with the punches. If you go on a spending spree, you just acknowledge it, cover those categories with money from somewhere else (or have it be on a credit card where it’ll warn you youre going into debt).
this always feels like such loading screen advice to me, like yeah thanks game i’ll try not to spend more money than i have!
sure there are people who need to be told but 99% of people fully understand that not getting shot is what they’re supposed to be doing it’s just that the whole game is a constant barrage of bullets from every angle. My finances don’t run low because i’m wildly spending money on frivolities, it’s the endless grind of necessity and the endless uphill climb towards a stable life - the reality is budgeting is literally an impossible problem, it’s impossible to predict how any particular purchase will have an effect on future purchasing power or standard of life especially if you try and factor in social and psychological factors. Even a simple question like ‘what point is it financially sensible to replace the threads on your car tire?’ is endlessly complex from a budget perspective, maybe allocating that money differently would allow allow a more significant increase in earning potential or save a larger future cost so that it would be more sensible just to eat the larger car maintenance cost later - and this could be as complex an option as looking after your mental health by socialising with friends to help relieve the stress of studying, maybe a better grade results in a better job that comes with it’s own car… budgeting is an impossibly complex and chaotic muddle of equations so pretending it’s as simple as ‘just do a budget’ is infuriating.
So this is just advocating for budgeting in general? Well let’s take it a step further…how do you (and others) go about building your budget?
I’m not seeing it yet - but YNAB is my current approach and I adore it.
I used to approach it in a project my income for the month and then assign that money into categories and into a savings pool. It was a good spreadsheet. I liked it.
But I find the envelope system that YNAB uses extremely powerful. You can set your categories (and it encourages you to remember expenses that only come up once in a while and budget for them on a monthly basis) and then you use the money you CURRENTLY have to fund them. You assign every dollar a job. Which means I can totally splurge on a fancy dinner… But it means I might be pulling money I assigned to my ski pass out (I sound ridiculously entitled, sorry… the blog posts they have give better perspectives if you are starting from high debt or low income). And I don’t want to pull that money because I’ve been setting it aside slowly for months… So I don’t splurge on drinks and dessert or I suggest street tacos or cooking at home for my friends instead.
Thanks for your follow up comment because this post is more like a YSK: You Should Learn How to Budget From Somewhere But Not This Post