1/16/2020 0 Comments
Budgeting in the New Year
Happy Friday! We've hit the first snow day of winter and I thought what better thing to talk about today than budgeting! You might find it a very snooze-worthy topic but it's actually really important. Plus, you want to make sure to head into the rest of the year financially sound. However, I am not a money expert so feel free to take my advice or alter it for yourself!
Step 1: Take a look at your spending habits and patterns: Always sit down and look at everything you spend. Separate them into groups. One will be what I like to call the "Necessities to Live" group. This will include bills, food, clothes, gas money, that kind of thing. The second group is one that I cave into many times. It is the "Guilty Pleasures/Compulsions" group. It will probably amount to almost daily $5 coffees, takeout, spur-of-the-moment shopping trips (which aren't always bad), random miscellaneous stuff, and everything else you buy online at two in the morning. The next group is where your "Planned Fun" falls under. Movies, dinner dates, concerts, everything saved for in advance. The last major group is of course the "Emergency Fund" which everyone needs. It's $20 for dinner or $50 bucks for sudden car issues or a couple $100 in case of a really bad disaster. Once you look at it all then it's time to make some cuts.
Step 2: Reallocate funds: Once you've laid it out, make some decisions. I'd leave alone the necessities group and start with the guilty pleasures/compulsions. Are there things you can stop doing? Yes. Will you want to? No. Do you want to have money? Yes. My answer: Get rid of it. Instead of buying a coffee 7 days a week maybe cut it back to once a week or twice a month. You may be think $5 a day isn't bad. It's not but every of the year is. Here's some math. 5 x 7 is 35. That's $35 a week people! That could get you half a tank of gas or an entire new outfit. If we do 35 x 52 it adds up to $1,820. $1,820 a year! That could buy you an apartment or even a gently used car. Just think, you could save almost $1,000 by cutting out one little thing that could easily be made at home. My suggestion is multiply everything by how often you do them to figure out how much money you're spending overall. Then you could decide if it's really worth it. Once you've parted ways with some things reallocate that money. Add it to other bills, your emergency fund, or just put it away in savings.
Step 3: Start tracking: When I started my job this summer, I immediately created a spreadsheet to track how much I have and what it's been spent on. This really helped me so I wasn't confused on how much I had. Down below, you can see how I set it up. I date everything just for thoroughness and I always track the previous amount before I add in more because then I don't have to keep track of a lot of numbers. I have a separate column for money added and the new total because, again, it's just easier to read. I have a space for money taken out that's separate because there's some days where I only add, only subtract, or do both. You'll see that if I took out money, there's $0.00 put in for money added and a line through the added total. After I put in all the numbers, I add a description (what it was for) then highlight the box green (added) or red (subtracted).
Step 4: Live your life: You've done everything you've needed to! Analyzed your spending, reallocated funds after cutting things out, and created a simple method to keep yourself organized with your new budget. Now all that's left to do is go about your day. No more worrying about your budget until next week or month depending on how often you want to alter things.
Enjoy your newfound freedom with these four simple steps!
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The Blog in a Nutshell
Hi! Welcome to Fashion Fun and Extra, a blog run by Caroline Hill. A wheelchair user, podcaster, little sister, writer, and more, Caroline's unique view on life allows readers to take a glance into something they don't experience everyday. Told with humor, realness, remarkable wit, and a special kind bluntness, no blog will fail to entertain!