Budget like a BOSS

Your Guide to Financial Success and Becoming a #BudgetBabe

Author

Madelyn
October 03, 2023

Hey Laaaadieeeez!! It’s OFFICIALLY SPOOKY SEASON!!!🎃👻 What better way to get in the spooky spirit than confronting one of our (my) fears…BUDGETING!!😱
😭🤮(screaming, crying, throwing up.) You may be in the other boat, like why? Why are you so scared of budgeting, Madelyn? Well, I’ll tell you why!! Because my mother👑 (amazing women, shoutout mom if you’re reading this) has always encouraged me to learn how to budget, she even got me this little budgeting book full of envelopes for Christmas one year, but the problem is… I don’t know where to even start, or calculate what my spendings should be, how much money should go in each category, etc. Too much for my crusty little brain and too scary!! Well, have no fear! Here comes me! (Amanda Show reference that seems to have been forgotten in time since I can’t find the clip on youtube. ANYWAY…) To teach you how to budget alongside myself as I finally put on my big girl pants. (Hate wearing pants.) 🙅‍♀️👖🤢 Anywhooo, lets see what steps we should take when putting together a budget.

Are You Ready for It?

Why Budget?

Budgeting is an important tool for financial success, it helps you to make a plan for your money and be more aware of how much you are spending and what you are spending it on.

✅Step 1: Set Clear Goals

  • Okay, girlypops, what are your goals? Are you saving for a vacation, 🌴☀️paying off debt,👩‍🎓 or building an emergency fund? 🚨Knowing your goals will help shape your budget better than Kim K’s shapewear! (Don’t take my word for that, I have never bought a Skims product.)

🧮Step 2: Calculate Your Income

  • Do the scary maths & determine your total monthly income. This includes your salary, wages, freelance earnings (hot), rental income (if you slay that hard), and any other sources of regular income. Use your overall income (after taxes)📉 for accuracy.

🔁Step 3: List Fixed Expenses

  • Identify your fixed expenses, which are reoccurring, predictable costs that are pretty much the same month to month. Common fixed expenses include rent or mortgage payments, insurance, monthly bills and loan payments.💵

📊Step 4: Calculate Variable Expenses

  • List your variable expenses, which are costs that can change from month to month. These include things like groceries, gas, entertainment, tiktok shop, and personal expenses.

📝Step 5: Track Your Spending

  • Review your past spending habits 😧(uh oh) by examining bank statements, receipts, or financial apps. This will give you an idea of where your money has been going. (I know, sometimes I’m like “who spent all my money?!” Looks at bank statement… “Oh… t’was lil ol’ meh.”)

🛒Step 6: Create Categories

  • Group your expenses into categories, such as "Groceries," "Rent," and "Entertainment." Assign specific dollar amounts to each category based on your past spendings in those categories and based on your financial goals.

👐Step 7: Allocate Funds

  • Distribute your discretionary income (income minus ✨fixed expenses✨ so, money that can be spent by your discretion) among your expense categories. Be realistic (no delulu girlies here heehee)😵‍💫💅and prioritize essentials and savings.

👁️Step 8: Monitor and Adjust

  • Track your spending throughout the month. You can use budgeting apps or spreadsheets to help. If you notice you're overspending in one category, adjust by cutting spending in another. Ex: You may have spent more than you planned on groceries this month; therefore, you should probs not go out and spend money on drinks this weekend. Stay home, open that bottle of wine you forgot you bought 3 weeks ago with your best witches and carve pumpkins! (Or cast money spells.)👀🪄

📈Step 9: Save and Invest

  • Don't forget to distribute a portion of your budget to savings and investments. An emergency fund (car repairs, a pipe bursts in your house or a ghost breaks all your dishes in the night) and retirement savings are essential for long-term financial security. 🔒

🤓Step 10: Review Regularly

  • Periodically review your budget, especially when your financial situation changes, like a new job/promotion or if you move and rent changes. Adjust your budget to accommodate new income, expenses, or financial goals.

Remember, a budget is like a moldable-never-drying-chunk-of-clay that should change with your needs and financial situation. It's a useful resource for managing your money effectively and achieving your financial aspirations. 🌟

✋But Wait, There’s More!!🛑

Okay, so there are actually a few different ways to help you figure out a style of budget, if you’re a visual learner this may be more useful for you. (Seeing a pie chart scratches a part of my brain, IDK girl, I can’t explain it.)

The 50/30/20 Rule

The 50/30/20 rule is a straightforward plan for conscious spending and saving. It suggests that you should use 50% of your income (after taxes) for essential things like rent, food, and bills. Then, reserve 30% for things you want, like travel and hitting the clerbs (clubs). Finally, save 20%, which can go toward paying off debt, saving for retirement, or emergencies. This rule helps you balance your needs, desires, and savings.

From johnhancock.com

The 80/20 Rule

If you want an even simpler budget, try the 80/20 rule. This rule suggests saving 20% of your income and using the remaining 80% for everything else, both needs and wants. It's straightforward because you don't need to separate what you need from what you want. Some people like it because it's less strict, and you can automate your savings by putting 20% directly into your savings or retirement accounts. Be wary of this strategy, it gives you more freedom, which may lead to less accountability. 😬

From johnhancock.com

50/15/5 Rule

If you have a few different financial goals like saving for retirement, fun vacation spending money, or a new car, consider the 50/15/5 rule. It suggests allocating 50% of your income to essential expenses, 15% to retirement savings, and 5% to an emergency fund. The remaining 30% is flexible, allowing you to decide how to use it, whether for more savings, a new car, or other priorities. These rules are great starting points for budgeting, so choose the one that suits you best and remember, consistency in budgeting is crucial!

From johnhancock.com

Hot Girl Tip:

Here are a few apps I came across while researching that are meant specifically for helping you budget, these include…

  • Mint: Mint helps you create and manage a budget. It categorizes your transactions and tracks your spending in various categories. It automatically tracks your expenses by connecting to your bank and credit card accounts, giving you an overview of your financial activity.

  • YNAB (You Need A Budget): YNAB is based on the principle of zero-based budgeting, where every dollar has a specific job. You allocate your income to categories until you have zero dollars left to budget.

  • Personal Capital: Personal Capital offers a huge variety of investment tracking and portfolio analysis tools. It helps you monitor the performance of your investments. It also has retirement tools and can help you determine your net worth. (You can also pay for a financial advisor through this app.)

  • Goodbudget: Goodbudget uses an envelope budgeting system (like the one my mom got me, but virtual!) to help you manage your finances effectively. You can sync your budget across multiple devices and even share it with a partner.

  • Pocket Guard: This app gives you a clear overview of your finances, tracks your expenses, and helps you set savings goals. It also offers insights into your spending habits.

  • Wally: Wally is a budgeting app that allows you to track your expenses, set savings goals, and even scan receipts for easy expense entry.

  • Mvelopes: Similar to Goodbudget, Mvelopes follows the envelope budgeting system. It helps you allocate your income to different spending categories.

  • Clarity Money: Clarity Money offers expense tracking, budget creation, and even subscription cancellation services to help you save money.

  • Honeydue: Designed for couples, Honeydue allows you and your partner to manage your finances together. It offers features like expense tracking, bill reminders, and expense sharing.

  • Empower: Empower is an all-in-one financial app that includes budgeting, expense tracking, and high-yield savings account options.

  • Dollarbird: Dollarbird is a calendar-based budgeting app that allows you to plan your finances on a monthly calendar, making it easy to visualize your budget.

To Put it Simply…

Assess how much money you make, choose a budgeting style you think will work best for you personally and then finally follow that budgeting structure to construct your own personal budgeting plan. It seemed so big and scary before, but now we have the tools and resources to help us become more responsible with our hard earned money! What could be hotter than that?! The gates of hell this spooky season…

Now go forth & serve while saving!!! Talk to you later 🫶 

Madelyn

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