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April 12, 2016

How To Be An Adult: Making A Budget

Adult and Adult-in-Training

Being an "adult" means having to do a lot of things that aren't so fun like paying taxes, managing household finances, and sometimes not being able to do the things you want to do because you have previous commitments and responsibilities.

A great skill to have as you move into adulthood is the ability to budget. Mom is great at this skill when she leaves and I'm the one handling the household finances for a while. Here are my tips on how to make a kick-ass budget for a month and know exactly how much you have to spend on your next clothes/makeup/food/concert ticket haul.

  • Start with how much money you have overall aka how much money is in your bank account, ready to be spent on bills and expenses. I suggest you create a spreadsheet or a table for the month's budget and go week-by-week. Include boxes for all the expenses you'll have (and don't forget emergency funds!)
  • Next, calculate how much of that money needs to be allocated to bills. Make sure you think of everything: rent/mortgage, electricity & water, cable, phone service, internet (all the utilities) and any subscription services and credit cards that need to be paid off before the end of the month. These bills could be once-a-monthers, biweekly, or even weekly bills so make sure you add the payments needed every time they're needed in a month
  • After the bills, estimate how much you'll need to pay for your grocery trip, gas, bus fare etc. per week -- this is where meal planning comes in handy (you can also use a handy dandy grocery list form to remind you of things you can eat in a week)
  • Make sure you create a column for miscellaneous spending (this should be separate from your emergency fund which shouldn't be touched unless it's an actual emergency). The misc. column covers things like trips to the flower market or eating out, going to the movies etc. 
  • Finally, take a look at your calendar and note any special dates (like a friends' birthday that you have to buy a gift for)--this could mean taking some of the miscellaneous money from one week and saving it for the next
It's really not hard to make and maintain a budget and it's the easiest way to make sure you're on track with all your payments etc. Also, setting up online bill payment is an easy way to not have to remember to do it--you should still note it in the budget though so when money is gone from your account you'll know where it went.

This was the second installment of my How To Be An Adult series--posted every Wednesday. Stay tuned next week for safety tips!

xx

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