There are two sides to me.
One is on payday when all of a sudden I think I am Kim Kardashian and can spend money left and right.
than there is the other me… two days later I am scrambling trying to figure out how I’m going to make what is left of my check last for another two weeks.
I am just a college student surviving on a part-time job budget. I use to live paycheck to paycheck like most Americans; however, after searching for years I am finally in control of my finances.
I am blessed that I am able to afford my own place, car payment, tuition and bills with my part-time job and I will explain how I do it all here.
I use a budget binder and this is to help me organize my thoughts and transactions. This method is what works best for me personally because I have tried it all and nothing really seemed to stick until I laid it all out on paper.
I am a visual learner and I need to see things right in front of me to really grasp the concept. Having something that is tangible makes swiping my credit card that much more real. It is easy to forget how much money you are actually spending when we have paperless statements sitting in our e-mail somewhere.
I have been using Abby Lawson’s templates as the backbone of my budget binder. If you don’t know who she is she specializes in all things organizational. You can find the exact template I use on her website for free by clicking HERE.
In my opinion, the two essential templates you need are:
Reoccurring Expenses and (Monthly) Expense Tracking.
With the reoccurring expenses sheet, I am able to forsee what I need to pay whether it be annually ( car registration, taxes) quarterly (car insurance, car maintenance, contacts) or monthly (bills, rent, tuition, car payment, credit card).
The monthly expense tracking sheet is a tracking sheet that will allow you to see what you spend most of your money on. This sheet forces me to look at my bank account daily and makes me aware of my balance.
I can’t possibly be the only one who swipes so much that at times I’m afraid to even log in to assess the damage *insert monkey covering eyes emoji here*
This sheet will ultimately be the most important sheet in regards to saving. I’ll explain more about that later. Do not try to keep up with every template you find out there because it will overwhelm you and quite frankly it is just unnecessary.
Obligations or Non-Negotiable Bills
Great, you set up a budget binder now what? We have to establish your obligations. In other words your non-negotiable bills. These are your necessities in terms of living. I use a whiteboard that I bought from target in order to keep track of these. These categories are still translated into my budget binder but I find that having written out in an open space allows me to know what I am working towards.
My obligations are as follows in order of importance,
Gas / Electricity Bill
These three categories are non-negotiable I cannot not pay them. If I don’t pay my rent I won’t have a house. If I don’t pay my car payment my car will be repossessed. If I don’t pay my gas / electricity bill I will be living in the Stone Age. These are non-negotiable I HAVE to set aside money to pay them no matter what my paycheck looks like.
It is imperative to have your obligations in mind and know how much money you have to set aside when planning your finances.
Goal Setting and Reflection
At the beginning of the month, I start with a template in which I write my goal for the month. I try to stay within the range of two goals maximum because anything beyond that I have found I won’t accomplish. Usually, my goal will look something like this:
Create a sinking fund for car insurance in 6 months.
Now, what is my plan of action? I use three bullet points
- Put away 83.00 dollars per month.
- No coffee bean for the month in order to save for insurance.
- $41.50 per paycheck
Next, I will write down my non-negotiable bills with the dates I get paid. You always want to underestimate the average or your paycheck rather than overestimate.
Let’s say I get paid about :1,500 bi-weekly (not my actual income, not my actual numbers).
I would underestimate I will be getting paid $1,300-1,400.
March 3, 2019 Estimated Check Balance: $ __ ___ ____
March 17, 2018 Estimated Check Balance: $__ ___ ___
I will then subtract my non-negotiable bills.
CAR NOTE: $______
GAS + ELECTRIC BILL: $______
If I was to pay it all in one paycheck I guarantee you I wouldn’t have that much leftover. What I do is I tend to see what bills are due first and split the bills into paycheck one or paycheck two and pay them accordingly.
I did say I would come back to why the monthly expense tracking sheet is so important and here is why,
- At the end of the month, you want to be able to look at your tracking sheet and see where you spent most of your money. ( Starbucks? Target?)
- You also want to ask yourself were the things I bought an absolute necessity? (Did you really need that decorative pillow or those two coffees in one day?)
- Find ways to cut your spending if you went to Starbucks for 7 days straight and your caramel macchiato totaled to $33.25 at the end of the week how ’bout only going three times and making coffee at home. Now you have a difference of $19.00 that can go towards a savings account or a sinking cost.
At first, it might still seem like you are living paycheck to paycheck until you see your savings account start to grow by acting like you don’t have money to spend or giving yourself a budget.
Being aware of your spending and having a method is what is going to get you out of living paycheck to paycheck. Be in control of your finances! You make your money, so you should tell your money where to go.
what kind of method do you use to budget? does anyone else use the budget binder?