So I basically had a stroke last week when I reading through a chain email among my girlfriends from college (two of us are in DC, two are in NYC, one is in Philly, one is in Vegas, and the other is in California… we are dispersed to say the least and we use the email to keep up to date on what is going on in everyone’s lives). One of my friends actually requested that I write abut something on my blog!!! (I DIE!). So here goes nothing… my first requested blog post 🙂
The topic requested was budgeting. Wow, I know. Try to resist the urge to stop reading right now… I swear this is going to be fun. As I have mentioned several times here… my budget is tight… really tight. I want to live a full, amazing, meaningful, and healthy life while also being responsible about money. It takes a certain amount of finesse. What has always worked well for me is meticulous budgeting. I was first keeping my budget in a steno pad and doing it out by hand, but then a friend told me about how she kept her budget in an excel spreadsheet and I was like… GENIUS! Why didn’t I think of that? Excel does all the math for you. It’s brilliant… and it makes manipulating your budget easier. We all know that life happens, and sometimes I need to shift things around in my budget to accommodate an unexpected expense (like a lost cell phone or an unplanned trip to an outlet mall… don’t judge me). I now keep mine in Google Documents so I can access it / update it from any computer.
My spreadsheet has two areas: money coming in, and money going out.
Money Coming In: This obviously includes paychecks but I also include if people reimburse me for things. Let’s say I charge a take out order on my credit card for a group of people. I put the whole amount in my budget spreadsheet and then include how much people reimbursed me. For me, this was a more accurate accounting of money actually spent (because let’s be honest… 9 times out of 10 you don’t really break even in these situations).
Money Going Out: I break out expenses by the following categories: Standing Expenses (this includes my rent, insurance, cable, gym / yoga studio memberships, Netflix, stuff like that. Anything that is a regular expense every month), Incidental Expenses (this includes gas for my car, doctor or vet bills, pet supplies, anything that isn’t a standard amount month to month), Groceries, Eating Out (I keep groceries and eating separate), Personal Care / Maintenance (this includes products, trips to CVS, pedicures, and things needed to maintain my apartment) , Sporting Goods / Running Expenses (I realized that I was spending a good amount of money on this stuff so I decided to make it’s own category), Entertainment (this includes drinks out or if I buy alcohol for home, movies, concerts, activities, stuff like that. I do not include eating out here), and finally Shopping (I try to keep this to a minimum, but I do love to shop so I needed to make sure I was staying within budget while still feeding my habit. I also include things like birthday / anniversary gifts here).
How to start a budget: I took the standard amount of money that comes in every month (not including reimbursements, just paychecks), reduced it by my standing expenses, and then split the remaining amount across the other categories to create my baseline budget. Money is not split evenly across all categories. For example, my budget for groceries is bigger than my budget for shopping. I initially was including running expenses (like race fees, gear, shoes, etc) in with entertainment, but I decided to split them. It’s still the original amount that I spent on entertainment, just split. Some months I spend more on running, less on entertainment and vice versa, so I often move money around between those two categories. If I ever go over in any of my categories (like I spend a lot more on gas in a given month), I take money first out of my shopping budget, then entertainment, and if necessary personal care / maintenance.
Savings and Credit Cards: I budget in a set amount of savings every month, which I move out of my checking account into my savings on the first of the month (when I pay my rent). I set my baseline budget to spend about $200 less than I make every month to give myself a little safety net in case something big happens. If at the end of the month I have money unspent, I move that into my savings account as well. I try to update my budget at least once a week using my online account statements for my bank accounts and credit cards. I do not individually track cash purchases. For me, once cash is out of the bank it’s as good as spent, so I just track cash withdrawals under “entertainment” (that’s typically where my cash is going). This also means I don’t have to keep receipts, which I find make my wallet a complete mess. I charge pretty much everything on credit cards, but only because I want the perks! Credit cards can be very dangerous, I am completely aware of that! But by budgeting so meticulously, I never charge things on my credit cards that I don’t already have the money for. I pay all my credit cards in full every month, and I get SWEET rewards like cash, airline miles, and Amazon credit. It’s pretty awesome.
This post got pretty wordy and long but hopefully you find it useful!! As a reminder, this is just what works for me! I fully admit that my situation is not going to be exactly the same as anyone else’s. Everyone feels differently about money too… my budget is just a reflection of my personal values! This is the no judgment zone 🙂 Money can be really difficult and sometimes it TOTALLY SUCKS. I’ve had my fair share of rough months… but luckily I have been able to create enough of a safety net for myself that I can handle those.
I always try to remember that… LIFE HAPPENS. Happy Monday ❤