Season 4 – Episode 1: Budgeting Tips

Fashion is one of my many passions there are so many reasons to love it, but I bet you didn’t know that I am just as passionate about budgeting, investing and just overall being a financially responsible adult. Now I know that my blog is a fashion focused but I felt that it would be appropriate to at least talk a bit about money, whether it’s saving money, making money, or even investing money into the things that give me joy or the things that I need to use it for. Let’s be honest we all can’t have the wardrobe or do the things we want to do without having that $$$. So let’s start with the basics on how I budget.

I first analyze ALL of my expenses and I mean ALL of them. Every dollar counts. My phone, internet, credit bill, transportation, student loans, Insurance, entertainment, gym membership, a monthly payment for my braces, and a few miscellaneous things. I am lucky enough not to have to pay rent or utilities or even buy my own groceries I currently live with my wonderful family right now, and it helps a lot for my expenses.

The next step is to figure out how much I make monthly. (Since most bills are due monthly calculating your monthly income is the easiest way to do it. To do that is to start from the most current pay stub and then add all pay stubs that go until the end of the month then you get an estimate to how much you make a month. On your own terms you can do more math and see how much you make a week, or 2 weeks etc.

Now you know how much you make a month, lets tackle those expenses. So as you can see at the chart below I have quite a few expenses. Now a few of my expenses vary from month to month and some are a daily thing that I ALWAYS have to budget for. For example my payment for my braces, phone bill, gym membership, putting money in my savings account and retirement fund are things that I truly cannot skip on. The one thing I will say though is that my occasional credit bill is always paid in full.

Quick Tip – No matter the limit on your credit card; my rule of thumb is to use how much you know for sure you can pay off IN FULL every month. Personally no matter what my limit is I NEVER use more than $300 on it. That is how much I know I can pay in full in any circumstance.

Now that we know our expenses it’s time that we pay bills and put the money the right place or places we want it to go to. I also pay the full amount on all bills that are due. After all bills and deposits are paid which includes retirement and savings any thing left over I put in my splurge fund or misc account. Now my misc account is basically what it sounds like, think laundry personals and the occasional coffee and little nick nacks things I use monthly or etc. My splurge fund is exactly what it sounds like, its for when I am saving up for things that are higher than $500. The misc, splurge and occasional credit bill does change every month. There are 4 big tips I want you to remember when budgeting and being a repsonsible adult these are things that have helped me.

The 4 biggest tips I can give you are:

1.  DON’T SPEND MORE THAN YOU MAKE. It doesn’t matter what you do to make money do not spend it all at once and don’t spend more than you make. A good rule of thumb that I use is to spend about 10-20% of what I have extra money on things that I want and can afford for that month. I save the rest between my retirement and savings and also pay bills with the rest. It has helped me tremendously.

2. SAVE AS MUCH AS POSSIBLE. You never know when you run into a situation that requires you to use a huge amount of money at one time. What happens if you don’t have that?

3. ONE IN ONE OUT RULE. For example If I buy something that I have similar at home already then I get rid of the one that’s older and keep the newer version. For example I just bought a new pair of Adidas and I already had a pair, the only difference is that the older ones were hightop and the newer ones were low top. So I got rid of the high tops. Not only does this save space it also teaches you not to be a hoarder. I do this trick with everything clothes, shoes, sometimes makeup if I haven’t used it, and even at home products too.

4. CHECK YOU BUDGET AT LEAST EVERY 2 WEEKS. When you do you see exactly where your money goes and where you can cut back and add. I feel if you do every month it won’t be as beneficial to you and it won’t help make your financial goals. The easiest part is making the budget the hardest part is sticking to it. If I can do it than you can do it. The first official step is to get started. I hope this was helpful. If you have questions or comments on this let me know. I hope I helped you all with your budgeting needs.

Until Next Time

XoXO

Teri Michele

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