I’m all about saving money, but I’ve never ever created a budget. Ever. First of all, I hate math and numbers and the stress that comes with worrying about budgets. On top of that, I have no idea how much I’m going to be spending on eating dinner next month since that is usually dependent on an ever changing social calendar and/or how soon I will be seen in a bathing suit. Point is, there are better ways to budget yourself – and it’s by removing a chunk of money at the beginning of every month (or week if you prefer) that leaves you with what you have to spend on other expenses. To me, this is the technique that forces you to have money self-control. It’s pretty freaking simple, but here’s the breakdown:
Figure out your fixed expenses
Write down all of your monthly expenses like your rent, utilities and generally how much you spend on transportation and food, and then see how much money is left over. If there is hardly any money left over, you need to either re-evataute your lifestyle choices (get a smaller place, cheaper car etc) or you need to get a second job. You are never going to be able to retire if this is your financial situation (sorry it’s true).
Pay yourself first
Why this works
Sure, you may be able to get more money out of the bank if your allowance runs out, but having to dip into your savings account is a pretty decent barrier to make you think twice about purchases and your spending. It will also help to put your whole financial situation into perspective so that you can re-evaluate if your lifestyle is in line with your savings goals. Make it an automatic withrawl and believe me, you will soon adjust to accommodate your new “budget”. It may take a few weeks of eating hot dogs and macaroni, but you’ll be happy you made the sacrifice when you’re out of debt and have some decent money in the bank.