How I Got Budgeting To Work for Me
Updated: Jul 16, 2019
An extra's guide to budgeting
My friends often call me extra because I am definitely over the top when it comes to organization. Tips for having good credit, organizational tool suggestions, or even tips on paying bills. I am your girl. I even have an extensively detailed inventory list of all of the items I own. All that being said, I just figured out how to get budgeting to work for me.
Mint used to be my best friend when it came it budgeting. Prior to July of 2018, Mint had a bill pay feature. Because of this feature I was constantly monitoring my spending, my budget, my goals, my balance, my bill dates, and my credit score. Now that this feature is gone I really only use Mint to check my credit score and optimistically check to see if the feature it coming back - it is not.
Ironically after the bill pay feature was removed the only thing I found difficulty with was budgeting. I never had issues paying my bills. Bill pay was just another way for me to compulsively check that my finances were in order. I was constantly seeing all of my finances in one place. It was the first time budgeting actually worked for me.
Now that the main thing holding me there was gone, I needed to find a new method. I tried the cash envelope method . Not my thing. It frustrates me. I tried the the spreadsheet method. Not for me. It requires me open a laptop and not just my phone if I want it to be productive. I even tried having my mom be the gatekeeper of my money. That did not work for obvious reasons.
But somehow, the world took pity on my soul. I finally found a way to get budgeting to work for me. If you are interesting in finding out how, I suggest you read on.
Budget Per Paycheck
When I first tried budgeting, I tried the whole "monthly budget is life" thing and it was awful. After the first two weeks, I would fall off of the budget bandwagon and found myself adjusting the budget or just completely ignoring it. For me, a month was just too large of a time period for it to actually be effective.
I am convinced that monthly budgets are traps to stop people from budgeting. I budget my paychecks instead of budgeting by month. I analyze what bills I am going to pay for with my next paycheck and then I review what I have left over and that is what I am allowed to spend.
I never have to worry about savings because I automate my savings and I hide my savings accounts. This is so amazing. I never see the money leave my account and I never see the total of my emergency fund so I am not tempted to move that money over.
I Minimize Mixing Credit And Debit
I prefer to pay for as many things as possible with my credit card. I, of course, pay everything off in full. I budget around my bill pay strategy. With the way that I bill pay, it is way easier for me to only have 5 things coming directly out of my checking account rather than 100s of micro-transactions just floating around and me not knowing where it's coming from.
For me, it is just far too hard to figure out where my money is going that way. I do not care how many different pie charts these institutions show me. Having a transaction history in my bank account not be organized when I look at really kills me inside.
I prefer to designate my credit cards for different categories. This helps me maximize my cashback rewards. I know to only use Discover for restaurants and going out and anything Microsoft related, I have my automatic bills linked to my Capital One and my grocery and gas goes to my Bank of America. This way at the end of my statement, I know where the majority of my spending is going. Now that I have written it down, I guess I also budget around my credit card strategy as well.
Keep Inventory of Everything
No really. I keep an inventory of everything I own. Of course, it is not fully completed but trust me it is beautiful.
It is still a work in progress. For the most part, I have completed adding my hair products, beauty products, health products, food items, and kitchenware. Next, I plan to add my clothes.
All the craziness aside, it is actually so helpful for me in terms of saving money. When I went from chemically straightening my hair to being natural, I became obsessed with the process. I studied and did research and tried out as many hair products as my poor little bank account could afford.
One day, I realized I have way too many products that I did not even try before buying more. The best way for me to combat my shopping problem was for me to see everything I own written down. I love numbers, reports, and analytics so having this data in a spreadsheet works well for me.
It also helps me know when I need to stock up on something. It makes grocery shopping easier but it also helps me realize that I do not need to purchase another body mist from Bath & Body Works when I already have 3 full 8 oz unused bottles.
Am I saying you need an intense inventory? No. Not at all. I am saying it can help curb that make-up spending habit you have or stop you from ending up with 10 pasta sauces because you forgot about the 5 bottles hiding behind that can of tuna.
This is so incredibly important. You need an emergency fund. Most people recommend having 3-6 months worth of expenses. My personal plan for an emergency fund is to get up to 6 months of expenses.
If you take anyway anything from this post, I want it to be the importance of an emergency fund. Life happens and when it does you should not just ignore it. An emergency fund can help cover expected expenses such as:
An emergency fund was always on my radar. However, up until a year ago, I was living with my mother so I did not take the importance of an emergency fund seriously enough. After I graduated college in May of last year, I spent the summer building up a small fund before I moved out.
I had .a good started safety net to catch me but I was nowhere near done. Then as life does, it happened. I had to drain my emergency fund. I should be been active about building it back up. Do me this favor, please. Once you use funds from your emergency fund, replenish it. Unfortunately, I still did not really feel the weight of how necessary it was.
It was not until I was in a job that incredibly unhealthy for me that I realized how important it was to have an emergency fund. I hated my job but I could not afford to quit. They treated me horribly, HR in this situation cared more about protecting the company than they did about the employees, and I found myself crying in the marketing closet.
I felt so incredibly stuck. I had rent to pay but also bills to pay but I could not just leave without another job lined up. And let us not forget, it is easier to get a job when you have a job.
Thankfully now I am out of that situation. I now work for a company that I love, treats me well, and has no marketing closet for me to cry in. I even now have the motivation to work on my freelance work. Most importantly I now have more in my emergency fund that I originally did a year ago. I automate 20% of my paycheck to my emergency fund and whatever I earn for my freelancing work will go to that fund as well.
Now is the time to get ahead of your finances! Try out my tips and let me know how it goes!