Budgeting and organizing my finances is definitely not my favorite part of being an adult. Now that I am paying for most of my daily needs, it’s important to learn how to spend wisely and pay attention to where my money is going. I’m still figuring out what works for me, but I’ve learned quite a bit from my parents and other adults in my life. I’m still figuring out how to keep myself organized and keep track of how much money I’m spending on unnecessary things.
College was a great learning experience not only in academics but also learning about how to take care of yourself. It was a great prep for learning to pay bills, get groceries, and pay for other daily needs. Here are some tips and tricks that have helped me understand how to budget my finances!
1. Create your budget
Make a list for yourself. Everything you need should fall under 3 categories: necessary expenses, fun expenses, and savings (or student loans if you have any). Take out a piece of paper and think about what you spend your money on. For instance, rent, groceries, and gas would fall under necessary expenses. Clothing, coffee, and travel, would fall under fun expenses. For savings, think about what you may need in the future. Create an “in-case-of-emergency” fund, and a fund to carry you through life such as a future retirement fund. (It’s never too early!)
via How Does She
2. The 50/30/20 Rule
Financially Fearless is an awesome book that breaks down how to keep your finances in tip-top shape to ensure a comfortable future. It explains the 50/30/20 method. This basically explains where your paycheck should be going each month or week. 50 percent goes to living essentials, 30 percent goes to whatever makes you happy, and 20 percent goes to saving for your future. Don’t feel constrained to these percentages, but this is a great starting off place. Keep in mind, the 30 percent is extra, not a must-have. Don’t spend money on fun things when you are unable to spend money on the important essentials.
Right now I’m in the process of stabilizing my finances; however, I love the idea of taking 5-20% of your income or paycheck and putting it into savings. It’s so important to build up your savings. If you leave it in the bank, it will build interest, and in turn, give you more money! It is also ideal to have in case of emergencies.
3. Save your receipts
via I Heart Planners
I keep my receipts in a cute little accordion-style folder. This is great for a few reasons. How many times have you gone to return something and realize you lost track of the receipt? Well if you’re like me, this probably happens quite frequently. This organization method keeps your receipts all in one place which makes them easy to find and sort! This is also a great way to keep track of your spending each week. Pick a day and take some time to go over what you’ve spent and divide them up into the categories above. You can also keep a spreadsheet on your computer and quickly add up your spending to track where you are.
4. Sales and Coupons
I live for sales and good deals! When I find something great on sale, I know I’m going to have a good day. Take the time to look through coupons online and through apps. You don’t have to be a crazy coupon-er, but it’s amazing how much money you can save by taking advantage of great deals. RetailMeNot, for instance, is a great source for finding coupons for your favorite stores. Ebates is also a great way to get cashback on purchases you make online. I’m also a big fan of Cartwheel, which is a must-have for all Target lovers. I have saved over $100 this year just but using the app! I also really like GasBuddy. It’s an app that shows the prices of gas stations closest to you. We all know what a big difference 10 cents make when it comes to filling up the tank! If you’re planning a shopping trip, search for some coupons or sales.
5. Visualize it
I’m definitely a visual learner, so anything that’s hands-on helps me learn and understand what I’m doing. While in college I had three envelopes. This is where I’d divide my money (just not literally because that’s probably not the most secure). When I’d get a paycheck or any money, I’d divide it into categories similar to the one I mentioned above. Each paycheck, a portion of it would go to saving, fun spending, and necessities. I’d write it down on a piece of paper and stick it in the envelope. This helped me visually see how much money I had and how much I have to spend for the week or month.
And if you’re really organized, I love the idea of a budget binder! I’m hoping to work up to that, but it’s such an awesome and fun way to organize your finances and spending.
6. Cut Back
If you find yourself going to Starbucks a lot, like I do, try limiting yourself to once a week, or a couple times a month. You could also invest in a Keurig or coffee maker with flavored creamers to avoid making that extra trip to the coffee shop. If you have cable, try replacing it with Hulu or Netflix. If you use your dishwasher, try hand washing your dishes instead. Find little ways to change your lifestyle to reduce your spending. There are almost always less expensive alternatives.
7. Reward yourself
Budgeting can be tough, but try not to deprive yourself and instead, give yourself rewards. It’s important to have spending money for fun. Not only does this allow you to buy whatever you’d like for yourself, but it also allows you feel less constricted to avoid binge spending. Save up and buy something nice for yourself, or spend a little less one month to indulge next month. Have fun with budgeting and seek help and advice when needed.
Remember, budgeting is more than tracking. Budgeting is about making sacrifices and figuring out what’s most important. There’s no cookie cutter method to budgeting your finances. There will be a lot of trial and error, but keep learning and figure out what’s best for you!
How do you keep your finances organized? Do you have methods for controlling your spending?