Bad Budgeting - Bree's on a Budget
A budget is an estimate of spending and income over a period of time. This can be a long period or a short period of time, but is easier understood if you think back to our good old piggybank days. Remember getting an allowance and storing it away for ice cream from the ice cream truck or a toy from the toy store? Budgeting it a lot like setting up adult piggybanks and trying our hardest not to take more than what we can afford to take (and some even have the benefit of gaining interest). One of the easier ways to understand the depth and complexity of a personal budget is to plot it out.
I know, I know. We’re not into graphs! So let’s make this even easier and more visually pleasing by using a pie chart.
Writing out your budget when you know, deep down, that the numbers won’t be in your favor is what keeps most people from doing it in the first place. But, that doesn’t mean that it shouldn’t be done.
After years of graduate level education, I hate looking at the money that I make versus the money that I owe, but it’s a necessary part of knowing what I have and what I don’t. As much fun as it is to live completely beyond your means, once that pendulum swings back, the fun’s over and it’s time to pay the piper. In an all out effort to avoid this instance in all scenarios, we have got to begin to plan!
This pie chart includes a very simplified version of my monthly expenses. Looking at my expenses in a pie chart format helps me to determine where the bulk of my money goes each month (and whether that is changing over time).
I’ve used very broad categories to start so that I don’t have a convoluted pie chart at the start of my budget that will only serve to overwhelm me. The categories and specifics include:
Education - This category will include student loan interest payments made monthly since my loans are currently in deferment, but will eventually include my monthly loan payment amount.
Savings - Saving from each pay check is a discipline that we should all get into regardless of whether we think that we can afford it or not. The bottom line is: an investment in our future selves is never too expensive.
Food/Car - This category will include my car note, the expense of gas each month and what I spend in groceries. Because I am pretty routine, I know how many times a month I get gas (and how much it costs when I go), I know what I eat each day and that I’m generally too lazy to go to the store more than one time a month, so I have a pretty good gauge of where this number sits from month to month.
Living Expenses - AKA “Comfy Living”. This category was made for those items related to shelter - rent, mortgage, etc. For me, this will be my rent payment, renter’s insurance, PO Box costs, utilities and so on. This is a fairly good chunk of my monthly income because I live in California and most certainly overpay in rent for what I get. But, regardless, I acknowledge that I am blessed to live where I live and to be able to afford to live where I live.
Monthly Bills - This category was made for my miscellaneous reoccurring monthly payments. That means that this category covers: streaming services like Netflix, Hulu, Amazon Prime, Disney+; wellness services like my gym membership; credit card payments; medical bill payments (if any); and, payments on other outstanding debts (if any). This category is the category that I expect to diminish over time. Right now, it takes up 30% of my income and my goal is to get that number down to about 10-15%.
Question: HOW CAN I LOWER MY ‘MONTHLY BILLS’ CATEGORY WHILE STILL LIVING AS CLOSE TO HOW I DESIRE AS POSSIBLE AND WHILE WORKING LESS THAN MY USUSAL THREE-JOB-LOAD?
There are things in life that I thoroughly enjoy purchasing - clothes, shoes, and coffee are a few big ones!
But, how can I manage to continue these joys while also budgeting? Well, I can start by learning how much wiggle room my budget even allows for such miscellaneous expenditures. Then, I can set that money aside and plan to spend only that, if the urge so arises. Or, if it’s not in my budget at all, then I suppose we’ll also have to set out time to discuss controlling my impulse-buying!
Budgeting is certainly going to be difficult for me, but not impossible! To hold myself accountable I plan on checking-in within forthcoming posts to The Bad Budgeting series. But for now, placing my overall budget into a pie chart has been helpful in seeing the areas where my spending or bills are excessive so my first task is to reduce in those areas.
Thanks for reading part 1! Feel free to let me know the budgeting tips and tricks that work best for you, as a beginning budgeter like myself or an expert!