Ok so who all took the challenge to write down all spending and eliminate one spending weakness? I would really really love to hear from you gals (and guys!)
It’s finally time to start talking about budgeting, and boy am I ever excited about that! I am really hoping you dear people will chime in on the conversation and give me your feedback as I write. I want this to be a discussion, and to get all your ideas, thoughts, and questions.
So……how does a person budget?
Well first of all, there are a few different ways to do it. If you have a set weekly or monthly paycheck, you can decide on your budget and keep it the same every month. If your income varies, you can budget off the previous month’s income, and this means your budget varies by the month. Or…..one more option is to have the set budget even if your income varies.
I go with the third option, but it’s not a right or wrong thing! The important thing is that you figure out how much money you are making (hopefully you already have been keeping good records!) and set a budget off that, whether it varies by the month or no.
The idea is to spend less than you make. Never all, and NEVER more!
For in-depth information on budgeting, I highly recommend Dave Ramsey’s Complete Guide to Money. This book is a very comprehensive on budgeting, and also contains valuable information on saving, investing, renting/buying, getting out of debt, etc. Reading Dave Ramsey’s books was part of what fueled my passion for finances in the first place.
How do I recommend budgeting? I am going to give an idea for a basic beginner’s budget plan:
Saving/Mission Trips/Emergency Fund: 15%
Now my personal budget percentages are different than that. But if your budget includes any debt payoff, or school bills, or even if you’re just pretty new at it all and spending less than 50% of what you make seems like hardly enough with all things considered, then this is a good place to start.
Also, just a disclaimer- I am primarily targeting single people living in a shared household (family or room-mate sharing grocery/rent/etc costs) with these posts. I fully understand that buying a house, and having a family, and things like that, do change the ball game here!
Here are a few thoughts on the different categories:
I really recommend, no matter your financial situation, that you give at least 10% of your income no matter what! And to me, 10% isn’t even where it’s getting truly fun! I think giving is the most fun thing we can possibly do with our income, so why not give alot more than just 10%?
Wayyyyy too many young people don’t even think about investing. This is really sad to me, because the prime time to do this is when you’re young and don’t have as many financial responsibilities. Children are a blessing, but they cost money! Same with marriage, and buying a house, and all those things. If you’re single and blessed with cheap housing, you have absolutely no excuse to not be investing a percentage of your income every single month. No one really does have an excuse to not invest, but especially not you.
It is a discipline, and I can’t wait to do a whole post on this! I absolutely love having monthly investing set up where the money comes out of my bank account every single month without fail. Most months I don’t even think about it. And the rewards down the road are mind-blowing! But I am saving that for a whole ‘nother post.:)
You kinda gotta spend to live. Just make sure you’re spending smart. There are so many ways to save money and spend less. Like buying your meal w/out sides/dessert/drink. Or only shopping when you have a list of things you need. Or buying a cheaper, older, used phone instead of the newest version. And so many other ways to bring your spending down.
Ok, so I have a story on this…..the other weekend when my brothers were all getting married (ok, not all 6 of them, just half of the 6:), I was trying to figure out details for my two different bridesmaid outfits. I had planned to stop at Dollar General after work the day before the first wedding, and pick up some new nail polish. Well, I got to the store and started looking at the selection. And thinking.:) I knew there was some polish at home that would work. I just wanted a certain shade, and to buy a new nail polish. But when I looked at the price tag ($2), and started thinking about how valuable that $2 really was, plus the fact that what was at the store wasn’t that much more amazing than the stuff in my bathroom at home, I walked away.
Guess what? By the time I’m 50 years old, that money, invested at 8% interest, will be worth $35. Yeah….the nail polish isn’t really worth it.:)
And it gets even better! That $2 could also make a significant difference in funding Arabic Bibles needed in teh Middle East right now. Click here to donate with a reputable and Godpel-centered ministry.
SAVING/MISSION TRIP/EMERGENCY FUND
This one is pretty great. I think it’s a great idea to have extra money set aside for car breakdowns, a last minute missions trip, etc. While I (along with Dave Ramsey) recommend putting the bulk of your non-spending/giving money in investments that will give you some return, it is smart to have a chunk easily available for the aforementioned things. Just make sure you aren’t accessing it for random spending sprees! That definitely doesn’t qualify!
My fund of this type would also be used for spending budget if I took off work for a mission trip, or travel expenses for said mission trip, etc. While you can figure this into your regular budget, I figure that because these things aren’t very predictable or regular, and I pray over them and am not spending the money impulsively, it works better to take it out of a special savings fund and thus keep my “personal monthly spending” budget lower.
Thanks for joining me today! I look forward to chatting with ya’ll in the comment section!