Budgeting When You're Broke

I am very familiar with being broke. Not to brag or anything (shakes head).

When I graduated from college my first job with a stellar 4 year degree.....paid under ....let's just say not a whole lot to live on....in an area (NOVA) that you can't even live by yourself on that salary, much less feed yourself.

This was of course after applying to multiple places (15...who counts?) in one night much less for 2 months with 4 interviews and no call backs (discouraged didn't begin to describe it...). HOWEVER, I wanted to not be broke so I did a temp job and part time job till I finally got my full time job.

I was soooo excited cuz even struggling broke full time is better than completely broke part time.

Helloooo silver lining ~~ Full time *victory dance*  (ARR eflon on flickr)

In my first year of employment, I was able to save 15% of my GROSS salary. *pats on back*

Did it suck? Yes
Did I go out much? Nope
Did I buy nice things? Nope
Did I eat out much? Maybe 2 times a month?

Really what it boils down too - I cut out all luxuries. All of them that were possible.

This first year is also when average gas prices were $4.11 a gallon.

That sucks... a lot....

If you're interested in having a completely OCD budget like myself, this is usually how I start it:

Add together the 2 paychecks you get a month, immediately subtract out how much you'd like to put in savings. (Please note: How much you put is savings is dependent on how much debt you have, debt should ALWAYS come first.)

Let's say I make 10,000 per month (I wish!!) and I want to put away 3,000 in savings.

Create a template and AUTOMATICALLY say you only have 7,000. You no longer have that 3K, it's not there, you don't have it, pretend it doesn't exist any more. (Unless you have a huge emergency, in which case, of course you access this).

Next, you should take out rent and/or debt payments (loan payments for college, car, house, etc...)

Let's say this person has a monthly Condo fee of $2,000.00
HOA fee of $350.00
Cell phone fee of $100
Internet & TV fee of $150
Utilities fee of $250

We are now left with how much? $4,150.00

Now let's estimate some other fees: Do you have animals? Subtract the insurance.  Do you have a gym membership? Subtract that out (note: the gym is a luxury....running outside is free....). Do you have other monthly expenses? Subtract them out now AND ALSO review them and ask yourself if you ABSOLUTELY NEED THEM. You may find out you don't..... *crosses fingers*

Estimate you gas money: I'll be honest - Mine is usually around $150 a month (oooooouch)

All these things add up, and I know none of them look particularly new. Do you see where I'm trying to go with this??
We all have rent, we all have cell phones, internet, utilities, etc...    Buckle up and take a good look at where your money is going!

OH GAAAAWWD NOOOOO (ARR Intelligent Sweetie Flickr)

I remember one month (after my first year of work) when I was feeling good and comfortable and I looked at my budget.... I had spent $200 on books.....in 1 month...ONE... yeaaaaaaaaaaa. I can't do that. I can't even rationalize that... honestly.... hahaha   It was me being stupid and not looking at where my money was going. HUGE MISTAKE - I CANNOT BE TRUSTED IN A BOOK STORE.  :\   

You might cry at the results you find and be terrified at how much you spend.

That's okay.

This is a learning experience. It's to make you think before you swipe that credit card. Cuz guess what?? You shouldn't swipe it if you don't have the funds to back it up!!!

Rules to live by:

1.) You should always have enough if your checking to pay off your credit cards fully.  
Why would you have a CC with a limit of 50K....if your GROSS salary is 50K....this is just trouble waiting to happen...seriously

2.) You should always put money towards savings - ESPECIALLY if you have a lot of debt.
Even $50 a month is something to work with. The goal is to have around 3 months of expenses available in your savings at any given time. 

3.) Do NOT live paycheck to paycheck
You should not be looking at a check of 5K thinking, 'OH I have a complete 5K to spend on whatever I want' No... it's time to be responsible (And thank your guardian angel that you somehow ended up with this check). Bills, Debt, and Savings come first. You can't buy that iPad when you have to pay rent.

What have been my main 'other' expenses this month?

Food
Paint (Daaaaaaaaaaammit)
Gas

I think that's it... I may have a $5 movie night in there or two. Cuz I am a full believer in the reward system. 
If I'm doing great with my budget IT SHOULD NOT HURT ME TO SPEND $5!!  Why? Because I've built that buffer in there. If I'm budgeting well, I can make a mistake, or have an unexpected expense, or maybe my car gets towed, and I'll be able to pay for it. WITHOUT freaking out that I won't be able to eat this month.


A budget is there to catch you when you fall, not to prevent you from flying.

People run into trouble only when they haven't thought about that 'falling' part, the 'consequences' aspect. A good budget-er should never be saying"

"Hrrrmmmm rent or booze, rent or booze? Well rent I pay in 2 weeks but I want booze now. Booze it is!"

^No.... just no.

Safely tuck away the money you MUST have and then all the rest is yours.


~A

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~P.S. If you would like help with your budget feel free to ask me questions or leave a comment. I even have a blank template I can send you if you're interested~