Budgeting 101: Basic Stress-free Tips we all need to know
Let’s just say finances are not precisely everyone’s cup of tea. We all love shopping, eating out and going on trips, but fear to check our credit card statements or bank accounts afterwards. Sometimes we have so many subscriptions we have no idea how much money we are spending every month, or even wonder where did the money go. As painful as it can be for some, sitting down and getting your personal finances under control is one of the first steps to learn how to live without worry because there is a fund that will feed and house you on rainy days.
“….and while spending is indeed fun, saving money is accumulating freedom”
To know the basics you don’t need to be an expert in Finance or Economics. Maybe you wont ever use trigonometry and integrals for your daily life, but you went through all those Math and Calculus classes for this, SO! here are some handy dandy tips and tricks to get your finances under control.
Let’s start with how much you actually have:
How Much $$
This is the most important step, figuring out how much money you are bringing in. Grab all your sources of income and add them up. If you have a steady-salaried job it’s easier to determine how much money is estimated to come in every month. If your salary fluctuates, then you will have to pay a closer look at your projection.
Find your Fixed Expenses
These are all your monthly bills (rent, utilities, cellphone payments, insurance, Netflix, Spotify, etc…). These includes -all- subscriptions, and the funny thing is that most of the time we are not sure of how many things we are subscribed to. We can handle this by, 1) a more conservative way, going through your inbox and grabbing all the bills you have received that are not adhoc purchases (a Sephora receipt, for example, is an adhoc purchase). That way you’ll have a better idea of how much of your income goes away. And 2) budgeting apps can help you out in the process. Albert App is a good one. It helps you figure out how many subscriptions you have, set up a budget and even sends you notifications if you are expending too much.
Find your Variable Expenses
This can be a little tricky because they are not the same every month. Variable expenses include your grocery shopping list, the online shopping you did because you were bored, happy hours after work, new hair color to change up your look, maybe a massage or a facial? A good way to find out is to look at the past six months to find an average.
Good old Math
This is were math comes into play. Once you’ve got all your numbers, grab your expenses and subtract it from your income. That gives you a picture of how you are doing financially, and helps you determine if you need to do some adjustments. Maybe you’ll find out you have extra money you can put into savings, or you will have an idea where to cut back your spending.
Now, let’s plan how to save $$:
+The easiest way is having a portion of your paycheck automatically transferred over to your savings. This can be set up through your online banking. You know what they say, “If you don’t see the money, you won’t be tempted to spend it”.
+Cut off on your daily Starbucks: Start making your own coffee drink at home. A good investment is getting a Nespresso or Keurig machine and a frother. You can make your own lattes in no time, and saving those daily $$ at the end.
+Be goal-oriented: If you have a vacation in mind, learn to say no to buying breakfast every day, or eating out or take out every night. Maybe cook at home with friends or prep your breakfast the night before. It’ll help you save money, and calories.
+Save money on Online Shopping: I swear by these two apps, Honey and Shoptagr. Honey finds discount coupons available on any online store you’re in, and Shoptagr allows you to add items in your own personalized lists and notify you when these are on sale or back in stock. Most stores have random flash sales we never know about, and these two apps help you save extra $$.
Money stashed in your bank account makes you richer than wearing all designer. You can buy those shoes or that bag, but pay your rent first.
As always, thank you for reading!
See you soon,
xoxo
Esther