5 Tips to Budget Like a Boss B!tch 👩💻
Updated: Oct 20, 2019
What's the deal?! I put a whole almost 8 hours a day into my office job and only take two sick days for "self-care," yet despite all of this grueling work, at the end of the month I have 0.0 dollars in my bank account? What happened to my hard-earned paycheck?? It seems to have disappeared just like all my exes did from my Followers - @instagram this is clearly a bug, pls fix as they need to know I'll be in the Maldives next month, tysm #instagramdown.
I mean, I didn't even spend that much this month, like obv there's my $300 Barry's membership, but that's a non-negotiable as people NEED to know I workout with hotties - and I could no longer go out in public with this pile of dark mud on my head, so naturally I had to get a haircut and balayage for a reasonable $330...ohhh I get it now...
Sound familiar? The good news is there is hope ya'll 🙏. According to Fortune, 1 in 6 millennials actually have at least $100K in savings, so some of us are doing it right, although I have a sneaking suspicion that some of these "millennials" are really just famous rich-girls Marissa Cooper and Summer Roberts still trying to pass as young people (but actually RIP Marissa - holding out hope they'll bring you back in the O.C. reboot.). Side note: these findings included retirement and investment funds as well, and it was also self-reported savings of a sample of 375 participants - so always be critical of selection-bias and sample sizes in research.
Welp, April is upon us and it's time for some serious financial spring cleaning. Clean up your wallet using our 5 tips below to budget like a true boss b*tch:
1. Determine your #moneygoals
What are you trying to achieve financially in the next 1-5 years? Saving up for a down payment on a condo or wedding? Paying off that grad school loan debt? Building up an emergency fund for when your parents finally cut you off the Verizon family plan? Whatever it is, get clear on where you're heading. It is important to make these goals attainable rather than aspirational given your current circumstances and resources.
2. Calculate your monthly income
This one should be pretty easy. Add up your income from the paychecks you receive in a month. This will be your net income as these are post-tax and 401(k) contribution dollars. If your income is variable from month-to-month, take an average over the last few months or make an estimate. SPOILER ALERT: your monthly spending goal will be LESS than what you earn. Just like losing weight is a function of calories-in, calories-out, saving money means spending less than you earn.
3. Backtrack to get your average spend
Review the last three months of expenditures via your credit/debit card and bank statements, and take the average to get your typical monthly spend. Create categories for each expenditure and observe how much of your monthly expenses is taken up by each bucket. General categories include: rent/housing, utilities, transit, food and dining, shopping, travel, health, entertainment, other. These are separate from savings and investment contributions, and loan/debt payments. Is your typical monthly spend more or less than the monthly income you calculated above?
🔥 BONUS TIP: automating payments straight from your bank account and using plastic makes it easier to track your expenses. A credit card also builds your credit and can set you up with some amazing #rewards and cash back. Just make sure to pay it off as you go 👍.
4. Adjust and cut
Make adjustments to your monthly spend. From which categories can you cut? Where is the bloat and excess coming from? Whittle your budget down until it's not only less than your monthly income, you have as much leftover cash to save or invest depending on the goals you created in Step 1. If you're still struggling with how to allocate your income, start with the the 50/20/30 plan: 50% for necessities like housing, groceries, insurance, etc., 20% for long term savings and financial goals like debt payments, emergency funds, investments, Roth IRAs, etc., and 30% for lifestyle expenses like travel, concerts, sportsball events, lip kits, etc.
🔥 BONUS TIP: Save first! Save what you need to reach your financial goals as soon as your paycheck hits your account (before you spend a dime), instead of waiting to see what you have leftover at the end of the month to put away.
5. Track, revisit, adjust
Retrain your brain to channel your obsessiveness with checking social media to checking your expenditures. The easiest way to track is with a budgeting app like Mint or recording in a spreadsheet. We made our own budgeting tool for you to customize and record your expenses here! At the end of the month, review how you did against your projection and adjust accordingly.
*This post is for your entertainment and commiseration only, we are NOT your financial advisors and have not assessed your financial situation as your fiduciaries (duh), aka don't make any big money moves solely bc of us - we are all in different places in our financial journeys~*