Scanning the kitchen pantry, you take stock of your options. The sight that meets your eyes is anything but inspiring, as your mind strains to figure out what you're going to make with a brown banana, three slices of stale bread and a months-old pack of instant noodles. As you stare frowning at the banana slices floating listlessly in your less-than-conventional bowl of Ramen, you shake your head and wonder "how did it come to this?"
If you're anything like me, you've been here before. You have a decent job with a decent salary, and the money you take home should by every account be plenty to sustain your modest lifestyle. Nevertheless, somehow none of this makes the slightest difference. The end of each pay cycle finds you aggressively pinching the last of your pennies, wondering how this happens every single time.
Don’t worry: this doesn’t mean that you’re unintelligent, or that you lack some basic competence that everyone else has. It just means you need to work on your budgeting! No one is born with an innate ability to manage their financial resources, but the good news is that this ability can be developed and honed. With some careful discipline and hard work, you can budget like a pro!
Budgeting 101
Before you can become the modern (and hopefully more reasonable) counterpart to Ebenezer Scrooge by becoming a master money manager, you’ll need to learn a bit more about what budgeting actually is. So what is budgeting, more exactly, and what does this practice look like in the year 2022? Let’s find out!
Keep track of your money
The first thing you need to do when budgeting is figure out what your monthly income is, and what your monthly expenses are. This might seem like a no-brainer, but if you want to budget you need to be profoundly aware of the fact that you won’t have any success unless you know exactly what you’re making and what you’re spending.
So how do you keep track of your income, for starters? Well, that depends on what you do for work and how you’re paid. If you’re paid a regular salary in paychecks, keep the stubs. If you’re a freelancer working for individual clients, create an invoice for each transaction. If you’re getting paid under the table, write down when and how much you’re paid. In fact, writing down income is a good practice for everyone to implement, regardless of their employment!
The exact same thing applies to expenditures: no matter how you spend your money, make sure that you know exactly where it's going, and in what amounts. Keep receipts, write down cash payments, screenshot digital invoices and other records of any money that leaves your hands for those of someone else. Until you know where your money is going, you won’t be able to budget effectively!
Cut back on expenses
Of course, getting a bird’s eye view of your finances is only half the battle. If you want more money to put away at the end of the month, you’re going to need to cut back on superfluous expenses. Budgeting isn’t about finding new sources of income, it’s about better managing the sources of income you already have.
Chances are, you sustain a lot of superfluous expenses each month that drain your bank account and contribute to your impoverished state. If you want to get a handle on your finances, these are the first things that need to hit the cutting room floor. Take a long, hard look at the way you’re spending your money, and see what you can live without!
There are a lot of expenses that fit under this category. Multiple streaming service subscriptions? Ask yourself which ones you use regularly, and which ones you don’t. Premium memberships for platforms you don’t ever open anymore? Cut ‘em! If you don’t use it regularly, it’s probably a good idea to get rid of it.
Kick your impulse buying habit
Another thing that stands between most of us and our goal of financial freedom is impulse buying. We’ve all done this at one point or another; whether it was an overpriced article of clothing in a store window or a 3 a.m. DoorDash sandwich that costs twice as much as it does in the restaurant, no one is beyond reproach here!
Impulse buying might not seem like a particularly important thing to limit, especially due to the fact that most impulse buys are small items that don’t cost a lot of money by themselves. The truth of the matter is, however, that the seemingly insignificant purchases can drain you dry and leave you scrounging and scrimping for cash at the end of your pay cycle each month.
For many, these small impulse buys are one of if not the most detrimental factor impacting their financial stability. If this includes you, work on your self control and discipline. When you’re hungry and tired, drag yourself to the kitchen and make a sandwich. If you see something you want in a store, take a mental note and come back for it once you have some disposable cash.
Make a shopping list
Wait… what? How is a shopping list going to help? Allow us to explain. In the same vein as impulse buying, eating out and buying large amounts of pre-processed food is almost always a bad thing. It’s alright to go out for dinner every now and again, just as it’s fine to enjoy a TV dinner once in a while, but doing so too often will put a serious dent in your budget.
If you want to get a handle on your spending, one great way to do just that is by making a shopping list that consists primarily of ingredients for healthy, budget-friendly meals. By cooking at home instead of eating pre-processed meals and restaurant food, you’ll not only save money, but improve your diet as well!
Cooking your own meals doesn’t have to be overly involved or time consuming, either. There are plenty of easy-to-prepare recipes available online, most of which are far cheaper than anything you’ll find on the menu of even an inexpensive restaurant or pre-made meal. What’s more, it’s often faster too!
Put money in the bank
Once you’ve started to get the upper hand in your own personal battle of the buck, you might be pleasantly surprised to find that there’s still a bit of cash in your pocket on payday. Eyes now alight with the realization that you’re now beginning to achieve a sense of financial stability, your first impulse might be to spend that spare cash. We’ve got one word for you: don’t!
Okay, okay. If you want to spend a little bit of your newfound wealth on a couple comfort purchases, that’s alright. You don’t have to be a complete miser to be financially stable, and there’s no sense in having extra money if you don’t spend some of it on self care. But we warn you: you’d best not spend it all.
After you’ve treated yourself to a couple pleasant purchases, it’s time to squirrel the rest of your surplus cash away in a savings account. If you don’t have one, open one; if you have one already, that’s just one less step to worry about! A savings account will keep your money safe from your most decadent impulses, and over time can help you accrue amounts of money that may surprise you!
Conclusion
In a time when the average working-class Joe or Jane has less disposable income than ever, the idea of budgeting can seem like an impossibly difficult or senseless task. Hopefully this article has been effective in convincing you otherwise. It won’t be easy, but budgeting is not quite as hard as you might previously have thought. We wish you the best of luck!
Comments