May 15, 2013

How to Budget Your Money When You Make Next to Nothing

When you graduate college, life can get kind of boring. You don't go out on a Wednesday night because you can't skip work on a Thursday. You stop looking at the weekend as a time to go party and you start seeing it as a time to catch up on sleep. The worst part about graduating college? You have to start budgeting your money like a grown-up. This means you don't have extra cash lying around for a Taco Bell run at 4 AM or a few hundred dollars to spend on booze. You have to budget your money like an adult now. And I'm going to tell you how to do it.



Figure out how much you make down to the last penny:

Don't guess. Don't estimate. Figure it out. Map out how many paychecks you will make that month. Count out how much money you will make in a week. Calculate it all out and write that number down. Try not to cry. It will be alright. I promise. Be proud of yourself! You are making a living. I mean, don't go waving that number around in people's faces because chances are, they make more than you. But still. Give yourself a pat on the back. Now back to budgeting.

Factor out bills:

This includes everything from rent to your iPhone bill. Whatever has a monthly payment, put it in this cost. Add up all your monies from utilities to car payments and then subtract that amount from the amount above. Again, try not to cry. If you have to go without internet, you can do so. Tons of coffee shops offer free wifi. You can be a wifi moocher. You're broke, you're allowed.

Factor out groceries, prescriptions, dog food, and other necessities:

Now start to think about how much money food costs you every month. Do you have a cat or a dog? Do they need to eat as well? Yes. This is the time when you can start to decide what you really need during grocery shopping and what you are just buying because you are hungry. Buy only the necessities. Don't forget about prescriptions, gas, and, if you are a woman, mother nature's monthly gift that requires a few purchases.

Factor out savings:

After you have subtracted your necessities and bills from your monthly earnings, now you can start saving. Put back 20% into savings. This is your cushion. You will be glad you have this. If my dad taught me anything it's that saving money is so very important. So now I'm teaching you. Save your money. Resist the urge to use this leftover cash to go buy those cute pair of boots. Don't worry, they'll go out of style soon enough.

And if you have any money leftover, splurge on a beer at dinner. Just one:

For you, 'splurging' means one beer at dinner. Other than that, just drink water when you go to restaurants. Scope out the cheap meals at your favorite places and make it your goal to go to the thrift shop for clothes. This leftover cash from the aforementioned bullet points is your free cash. You can spend it however you please. But watch out. It goes fast. Trust me.

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