Total up all the categories you have budgeted, then look at your check stubs for the last month. If your pay varies from period to period, then pick a minimum. When I budgeted, I knew I was getting at least 20 hours per week, so that's what I budgeted with. Anything else I made went straight in to Savings.
Subtract your budgeted expenses from your total monthly income. If you have a positive number, yay! Allocate some of that money in to a 'Fun fund' (with the rest going in to savings) or tuck it all away in savings.
If you have a negative number, it's going to be a bad few months until you figure your shit out. This post is for you.
Let's review categories and make sure we didn't miss any of the basics:
1. Debt Payments
2. Bills
3. Non-Negotiable Spending (pet food, prescriptions, etc)
4. Negotiable Spending
5. Savings
We're going to start from the bottom up.
5. Savings
You'll read it time and again: Always pay yourself first! I agree, but only to a point. I was really good about putting money away each month. Sometimes it was only $10 per pay check, but I did it. When I was in debt I still did it. It got to a point where I had more in my Savings than my checking yet still went further and further in to debt. Why? Because I always paid myself first and had learned to never touch your Savings Account!
That was a great theory, but I was getting late fees on bills, never making progress on paying down my debt, and digging myself in to a deeper hole. I looked at my Savings Account and had 2 months worth of Bills, Non-Negotiable Spending, and Negotiable Spending saved up. I had plenty for the moment and let myself off the hook.
If you do not have a month's worth saved up, you do not have enough in your Savings Account and you do not have the option of not contributing money. Put at least 10% of the total of Bills, Non-Negotiable Spending, and Negotiable Spending in Savings as a minimum each month. Put more if you can. This safety net is integral. For me, a month's worth was only $800. Remember, this is not including Debt Payments.
4. Negotiable Spending
This is where I cut big time. This is where you should look to cut if you don't have a month's worth of money in your Savings. My Negotiable Spending consists of groceries, toiletries, and hobby money.
Obviously hobby money went out the window when I was really broke.
Groceries are the next easiest.
You know what's great about being young? Family. I'm on good terms with my family, but I was much closer to them when I was poor(er). Every evening and weekend that I had free, I would call a family member. I took my Grandfather to church (despite not being a religious person) because he would buy me breakfast. I helped my aunt work around her house because she loved to take me to lunch as a thank you. I called my dad for date nights and he'd cook us dinner.
I felt guilty initially. I felt like I was taking advantage of them. The more I spent time with my family members though, the more I genuinely valued and appreciated the time we spent together. It being good for my wallet was only circumstantial eventually. I now can afford to feed myself and still take time to be with my family. Just do it. It's good for your wallet, your relationships with these people, and your mental health.
What if family isn't an option?
- Learn to cook
- Look in to food banks (if you're in the red each month, you're poor enough)
- Community food assistance
- Low income mobile markets
- Ad match
- Give up a vice (soda, coffee, cigarettes, pre-packaged junk)
- Have smaller portions
- Always buy store brand
One thing that may be negotiable for some of you that wasn't for me was fuel. I live in a rural area and work in town. At this point I can only cut down on extraneous trips so much before I'm stranded. If you live and work in town, start walking, taking the bus, and bicycling as often as possible. Be sure that any time you do drive somewhere, you make the most of your trip. Hit the grocery store on the way home from work, go to the closer store even if it's dirty and full of homeless people, and commit to staying home on the occasional day off. You do not need to leave the house just because you have the day off. That's your ultimate save money on gas day!
Toiletries are last because it's not like you can just stop buying deodorant and toilet paper.
I found a secret stash of old products under my cabinet. I think most women have this stash. It's our shame stash of products that just didn't work quite how we expected. Well, when you're poor, that's what you use. Use of that stash. I once found an ex's brand new, unopened deodorant under my sink. I smelled like a man for 3 months, but I saved myself $4.
I used up old bottles of conditioner and shampoo that made my hair crunchy and as a result ended up wearing it in a bun every day for months on end, but I didn't buy shampoo for 2 years, and I went 9 months before buying new conditioner. a few bottles of shampoo and conditioner may not seem like much of a savings, but anyone who has a stash can attest that it was. In that time frame I would've bought some duds and added them to the stash, thereby spending even more money I didn't have. I easily saved myself $50 over the course of those 2 years. If you don't have a secret stash of products, then the only place to cut corners is buying store brand for a while and saving money a few cents at a time.
It does all add up though. It does make a difference in the end.
3. Non-Negotiable Spending
This is simple: Just make sure that what you've classified as non-negotiable really is non-negotiable. Cigarettes are not non-negotiable, no matter how many times you vaguely threaten that without them you'd be in jail. Suck it up.
The only thing to consider is prescriptions. If you're not using a generic, you may want to give your doctor a call and see if the generic is equally appropriate for your situation. I saved $15 a month by switching my prescription, but again, consult with your doctor. Generally a phone call is all that's necessary (and it saves you an office co-pay!)
No comments :
Post a Comment