The Beginner’s Guide to Budgeting Like A Functioning Adult:
-Basic Budget Worksheet-
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One of the things I hated most about being in college was the fact that I didn’t have a savings account. Any money I tried to keep, always ending up being used for last-minute trips to the movies or pitchers of beer at the bar. I vowed that when I graduated and moved home, saving was going to be my first priority along with budgeting more intentionally.
Turns out, it’s still pretty hard, even with a steady income. Plus, having to pay for all of your expenses yourself (when I didn’t in college) kind of put a wrench in my plans. But, I did eventually start utilizing a budget system that worked for me and the way I get paid. The original basic budget I created was made for someone who gets paid twice a month (10th & 25th). However, I’ve learned that’s definitely not common, so I’ve put together a version for you that should work for everyone’s pay style!
After creating the budgets and trialing/failing for a few months, I actually started to save without having to dip in to my savings to stay afloat. A huge reason for that was my expenses worksheets & basic budget. If you haven’t already, I recommend that you click here to read about the expense/bill tracker worksheets and read over how to implement them! 🙂
Ready to budget your finances?
A few days before payday, I usually sit down and look through my expense tracker. With how I am paid, there is one month that I have quite a bit of extra money and one month that is super tight (the paycheck that includes rent). I will look through my expense list and make a estimate of how much I will spend on fixed expenses (found at the bottom of the expense tracker).
Example: Bills due during the pay period occurring on the 25th through 9th of the month:
Rent – $550
Edward Jones – $50
Target Credit Card – $35 minimum (actually $27, but I always pay more)
Visa Credit Card – $35 minimum (actually $25, but again, always pay more than your minimum amount)
I always try to come in over my budget, so that way it’s a nice surprise to be under 🙂 Next, I budget how much I am going to allow myself to use for the three following categories: Fun, Groceries, Gas. It is up to you what you choose to interpret out of these and you may have three or more different. For example, eating out and coffee I consider Fun instead of groceries. I set aside the same amount for these three every month ($40 for gas, $40 for fun, and $150 for groceries)* I run all of this through as a hypothetical. It’s really easy to get paid and just start spending because you haven’t actually sat down and thought things through. This is why I start a few days early. Savings, Debt, etc can all be considered a fixed expense if your income allows for it (ie., I have a IRA that takes $50 dollars a month out of my account on payday) If you can set yourself up to have money going to certain areas, you are more likely to follow through. Pushing money around is confusing and honestly, not fun when you don’t have a lot to push in the first place.
Example: Assuming I have enough, this is my goal for the amount to spend under the following:
Groceries – $150
Gas – $40
Fun – $40
Total w/ other expenses: $900
As of right now, 900$ is what I will need to spend on essentials to pay off debt, and pay bills. When payday arrives, log onto your back account or deposit your check, to see your new checking account balance. This will be the number you work with to see if you need to tighten down on any expenses or less for groceries. I go ahead and add in my fixed expenses into my budget. There’s a spot for savings, expenses, and debt. I also add the amounts for the expenses that don’t change with due dates as to when they should be leaving my account or I shouldn’t count that money as technically there , but will add the grocery, fun, gas, in the worksheet without the amount until I officially know.
My Hypothetical Paycheck Amount was: $1000.00
This leaves me with a surplus of 100 dollars for this pay period. But, that’s it. If something comes up, there will be no buffer in my account, if I choose to put all $100 in savings or pay off more debt. This is when I look at my schedule to see which kinds of things I can expect for that pay period and weigh my options.
Options with surplus:
-Put all $100 in savings and have no buffer
-Put $80 in savings with a $20 buffer
Put $50 in savings, $10 as a buffer, and $20 more dollars to each debt payment
Put $40 in savings, $10 in buffer, and an extra $40 in my fun money since I have two girls nights planned
These are just a few examples of how you could rank that surplus. Some benefit from having to dip back into your savings later on, some benefit by paying off more debt, and another one benefits both, but puts a tight budget on your girls night. Everyone will choose a different answer, and none of these are wrong. We all prioritize our expenses differently 🙂
As the money leaves your bank account, that is when I check them as done. For the gas, groceries, and fun expenses, I have utilized the envelope system so that I don’t lose track of how much i have left, etc. I keep the cash in separate envelopes and use it accordingly. I also withdraw it on payday so those are a few expenses I can mark as done for the month! Once I’m out of cash in an envelope, i’m out for the month. This is helpful for some people because you can easily see that maybe next month, you budget less, since you rolled over, OR, keep it the same so you are slowly building a mini buffer (I do this with my gas envelope).
Here’s an example of an awesome way to utilize the cash envelope system that is way more durable and found for cheap on Amazon!
This was most likely super confusing to read and honestly, just as confusing to write. But, this system has worked for me for almost a year now and I’ve officially saved my first chunk of emergency money and started a checking account buffer 🙂 I look through blog after blog to find a system that I felt would work for me, and it ended up being my process that worked best 🙂
Click here for your free budget worksheets!
budget worksheet and steps 1-4 attached for reference!
**Is the budget template too small or you need some things tweaked? Email me here and I can work with you to make something you’ll use & love!**
Stay tuned for my future budgeting posts through this month about debt & savings worksheets!