Budget Your Life
By: Serena Patel
Life is expensive.
Sometimes when you’re having fun, you don’t realize how much you’re spending.
Various articles recommend saving between 15-20% of each paycheck, but this can be hard and doesn’t fit all people or income levels. Budgeting is something we all struggle with, so here are some tricks to help.
This is a super basic, beginner level article, but please stay tuned for future, more complex budgeting and money management.
Following are 4 steps to creating an easy budget to manage your expenses.
1. Break your life into categories. Here is mine for example
Rent & Utilities
Car & Transportation
Food & Drinks
Shopping & Leisure
Gifts & Other
Feel free to add other categories that are consistent in your daily life.
2. Determine how much you should be spending in each category. They say to limit your needs to 50% of your paycheck and wants to 30%, so if your after-tax income is $1,000.00, $500.00 should be spent on needs (rent, utilities, car & transportation, groceries, etc.), $300.00 on wants (shopping, movies, a night out, etc.), and $200.00 saved.
Depending on your income level, it can be hard to save as much as is recommended, especially if you have more “need” items. Don’t stress, over time after analyzing your monthly expenses, you’ll figure out how to better allocate your money.
3. On an Excel or Google Sheet (or whatever you use), keep track of each expense. Include the date, where/what it was spent on, and amount. Then add that entry to the respective category it falls under.
4. Each month evaluate where your spendings fall and see where you need to scale back. Again, it can be hard to save as much as recommended. Evaluate what categories you are spending the most on and if it’s possible to scale back.
You can change around what your goal amount spent in a category is, and update your running total for each often so you know when to stop eating out so much.
*If you would like a ready-made template then subscribe and email us at firstname.lastname@example.org. You can customize it to change the categories and use it year round.
**I know there are also Apps that can do this for you, but I think it’s also pretty easy to build a sheet and do it yourself. If you have any good App recommendations though, feel free to let us know so we can share it with other readers!