How To Budget Your Money And Not Live Paycheck To Paycheck Even If You Make A Decent Salary
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Blog – How To Budget Your Money And Not Live Paycheck To Paycheck Even If You Make A Decent Salary.
Let’s be honest, no one starts off wanting to live paycheck to paycheck, but if you don’t plan successfully, then that can be a way that you end up. If you’ve ever find yourself wondering, “Where did my money go?” you’re not alone. The good news here is that you don’t need a finance degree or a six-figure salary (I have neither) to start building the life that you want to live. With just a few simple steps, you can take control of your money and make it work for you.
With that in mind, it’s important to start by thinking of your income and your expenses.
Know Your Real Income
First, when you think about your income, make sure that you’re looking at your net income, not your gross. That would be your take home pay. Be sure to think about what other extra jobs you have such as you having a main job and then if you have some side jobs, like doing DoorDash. Now that may not be income that’s consistently the same amount every month, but it is income, so you may want to average those out to see how much you are looking to have each month. I used to tutor a couple of days a week once school was out, so I made sure I accounted for that. Once you finish with your income, you want to look at your expenses.
Track Each Dollar You Spend
Next, start by tracking what you are spending every month. Don’t forget those little things that you may spend, because sometimes it’s easy to spend $10 at Starbucks or about $2 for a Dr. Pepper at the vending machine at work (like I have) and you may not put it on your expense list, because that’s not something you consistently do. Make sure that you have a category for incidentals like that, or even set some money aside. I know that I love looking at makeup reels and I usually see a product I haven’t used before. That means a trip to Ulta or Sephora to try it out. Even though we’re moving towards a cashless society, perhaps put that amount, say a $20 bill) in cash in your wallet and once it gone, you can’t spend anymore on incidentals that month.
Build The Budget That Works For You
Now that that’s done, develop a consistent budget with what you are spending, what you can actually afford each month, and what you can have left over so that you’re not overspending. The key here is to create a realistic budget that you can stick to. Start with your essentials like rent, bills, and food and then work on your savings. Be intentional about your budget so you won’t feel restricted.
Start Saving – No Amount is Too Small
The budget is done, so what’s next? Savings! It’s important to think about what you would like to put into savings.I was always told you need to have six months worth of bills set aside. As I was looking at my own savings account – it is important to have one – I didn’t really give myself too much of a timeline to reach that goal, but I wanted to make sure that amount of bills set aside at some point. My first goal? $1,000. I started by putting in $75 per month. I have my savings and checking accounts attached, so it was easy to transfer over each month. Once I reached that goal, I bumped it up to $1500 and then I just kept increasing the goal as I went along. In the end, even though it took me a while to reach six months of savings, I didn’t touch it. I’ve kept it going to this very day because you never know when an emergency may arise and they come around from time to time. For example, I recently had to have some plumbing work done and my dog had an emergency vet visit all in the same month. Having that extra money set aside helps when you have those unexpected bills and it didn’t wreck my budget.
Your Budget = Your Power
When you know what you’re earning, track what you’re spending, and start setting aside even a little at a time, you’re moving towards something powerful: financial freedom. Budgeting isn’t about cutting yourself off from having fun. Give yourself room to breathe – you’re building peace of mind and breaking free from the paycheck to paycheck cycle for good.
You’ve got this and I’ve got you!
