Money Matters: Budgeting Takes Practice

Budgeting takes practice

I don’t know about you, but every time I hear trips and tricks about saving money, the root of it all starts with budgeting. And it sounds simple enough to believe it. Make a list of all my monthly expenses and stick to those costs alone. The idea is that if we can spend less than our take home pay, we can save for a rainy day or that dream home fund. But, what these experts fail to share is that budgeting isn’t some secret ingredient the rest of us didn’t know about. Budgeting takes practice.

And a lot of practice. If you get budgeting down on your first time out, we’re donating your brain to science. Sorry, you don’t have a choice in the matter. I need to know how your mind works.

But if you’re like me and perhaps the rest of us, creating the list of expenses is the easy part. Sticking to it is the challenge. And something as trivial as dinner with friends can throw it all off kilter. Which isn’t fair, but real.

So, then, if budgeting is harder than it sounds because of surprise expenses, how can we be successful at it? Especially if we’re generating a second or third income stream?

Practice. Practice sticking to only the expenses you have to pay. Nothing more. If you’re the social butterfly but still want to budget, one of your expenses line items should either be miscellaneous or entertainment. That way you can include dinners out with friends and going to the movies as part of your budget. Ideally, you want to reduce how often you go out and spend money. If wasn’t made clear earlier, the whole point of budgeting is to save money. And spending money is the direct antithesis of saving money.

But back to the practicing of budgeting. The part we may need real help on: takes time and commitment. Chances are, we’re going to splurge on occasion. Or have an unexpected but important cost come up. It’s called life and she’s not always nice. So start practicing with weekly budgets. See if you can go one or two weeks without calling an Uber and Postmating lunch. Pay off a credit card to reduce an expense.

Want to make it exciting? The money you don’t spend, open up an high yield interest account, put the money you would normally have spent on frivolous things and save it for the end of the year. You can either treat yourself to something posh and outlandish or invest it in yourself or your future. Either way, you’ll have the money and the options to do so.

Money Matters: Budget, Even While Traveling

So this is the last time I’ll mention my new job and traveling to New York (hopefully) but I wanted to quickly share and remind you about the importance of budgeting even while traveling.

Simply put: have a dollar figure that you’re not willing to go over.

Now, I was fortunate because my new job was comping us for breakfast, lunch and dinner for the days we, the company, didn’t eat together. Which was great. That meant less money out of my pocket. But that’s not always the case. I may have very well had to supply my own meals in which I would have had to decide how much I would be willing to spend on each meal, budget accordingly and ensure I didn’t go over that dollar figure.

In my case, as silly and perhaps lowballed as it sounds, I didn’t want to spend over $100 while in New York. Crazy, right? Well, I had most of my facts up front. I knew the company was going to supply or comp our meals. I knew the company was going to pay for transportation to and from the airport. And the company had already supplied the hotel room. So logically, what more did I need to spend on other than getting around the city on my free time and a few souvenirs?

Budgeting, wherever you go, is easier when you have all the facts.

Think about it: how much would you know to stock away if you didn’t have an estimate, at the very least, of what something – an item, a meal, an event – was gonna cost? Even in a city like New York where the cost of living is 13% higher than Los Angeles, I still budgeted to the best of ability.

How do you budget when you travel?

September’s 💵 Money Challenge 💵

I know. It’s Labor Day. The one day of the whole year which is supposed to be dedicated to not working. I get it. I also don’t care. Not because I’m evil or mean or a monster. Because I believe in Mark Cuban words: when the other guy is sleeping, you need to be busting your butt off.

I firmly agree with that.

So what better time than to get a jump on your week and finances than on a day when everyone else is ‘laxing it up?

We made August the month about zeroing in our income and expenses. And we even threw in a budget to better watch our money. I think September should be about designating our monies to savings account. We already said we’d budgeted it in.

So how much and how often? Or do you want to do the weekly savings challenge: your first week of savings, $1, your second week of savings, $2 and so forth and so on.

So how much are you willing saving, how often?

August Money 💵Challenge 💵 #3

Okay, so we missed last’s week check-in on our money challenge, but that’s all right.  Consider that week an extra seven days to figure out your budget.  I mean, after all, I did say you would gonna need to look over some of your automated monthly subscriptions and decide what you didn’t need anymore and could live without.  And that may mean giving up some things you probably really wanted when you first got it.  But now that you have it — psssh, it’s just money down the drain.

So, we’ve written all out all our expenses and every thing we’re spending our hard earn money on.  Great.  Next, we worked on a budget to figure out which of those expenses we could live without to stop some of our money bleeding from our wallets, because money gone is no joke.   And having two weeks to figure out how badly we need our Netflix account was probably not enough time, especially for someone like me, who doesn’t have cable or satellite anymore.   I’m not glued to the television 24/7, when I want to watch a little TV, I’d like the option to be there.

Next and final step for August:  Deciding how much we want to save, for what purpose and into what accounts.  I personally have a 401K through my job I’ve been investing in for about two years now.  I have two savings accounts, one with a traditional bank – Chase — because access to my cash for immediate funds is easier to get a hold of than my internet bank account – Ally.  Why do I have both?  I think saving should be rewarding and Ally offers me 1.85% interest on my cash.  Now may not sound like a lot, but when banks like Wells Fargo, Bank of America, and Chase are only offering something like 0.01%- 0.05%, my 1.85% begins to look pretty nice.  Why even bother have the Chase savings account then?  Well, it takes a few days to access my money from an internet bank without incurring an expedited fee.  Ask me how I know.  So, I have them both.   I wish I could get the best of a great return percentage on my money of an internet bank with the convenience and quickness of a national branch.  But that’s not aligned in the stars for me just yet.   And in addition, I have one of those robo-investment accounts through Acorns.  So, I have dollars saved all over the place serving different purposes for different goals.  But the point is, I have it saved.  I budgeted saving into my plan.  I don’t need DISH TV.  I do need a retirement plan.

So really begin to look at your money and see how it can better serve you.  And be honest with yourself as to how much you can save each month.  If you can save $100 or more, great!   If you can only save $25 or $50 a month, that’s still great.  Everybody’s got to start somewhere.  But you gotta start.  So, think about it.  How much can you save a month if you got rid of some of those unused monthly automate subscriptions?  Are you working to live in the present moment today or do you want to have a future someday independent and on your own terms?

August’s 💵 Money Challenge 💵: First Comes Budgeting…

…then comes planning.

Aaaah! I know I’m a few days late following up on our money challenge for August, but I wanted to check in quickly and get us started for this week even though it’s half way over. But no worries. This next part is easy. Ish.

Now last week we wrote out our expen6se, right? What’s going out? I did it too because what’s the point of calling it our money challenge if I’m not participating, right? I used an Excel sheet even though I also use Mint and Trim to help me stay mindful of upcoming due dates. And I have a little over $1,800 in life expenses. Wowzers. Now, for LA that’s actually on the low side and to be fair, here’s why:

  • I don’t have a car payment. Got a used car from a friend, paid in full.
  • I live in a studio apartment for under $1,000 a month, utilities included.
  • I don’t have cable or satellite service. I have a Roku device. I cut the cord about 2 years ago. I only subscribe to Amazon Prime and Netflix (the $7.99 Netflix). So my in-home entertainment costs is a little over $14 a month. And I love it.
  • I take the bus to work and most places — and I have a car? Well, my mom drives the car since I live about 1.2 miles from work. That monthly TAP card for the bus is about $100.
  • I’m still on our family plan cell phone bill with T-Mobile. I do pay the bill for all of us, but if I didn’t, my portion would average to about $60 a month.
  • I also save about $100 a month. That doesn’t include the 401K account I have with my job in which $280 is deducted from my check before taxes even are every month.
  • I try not to spend no more than $200 on groceries and $60 on eating out for the month.

A little rigid? Yeah, maybe. Why? I have a dream home in mind. That’s why the budgeting, that’s why the cutbacks in certain luxuries or amenities. I want something bigger and better down the line, so I’m making small sacrifices today.

So, the next part of your our August money challenge is to figure out why we’re budgeting and what we can live without for little bit. Make budgeting plans.

I can live without cable or satellite TV. I get most of my news from the internet anyways. I’m down for reruns and I get to discover a bunch of stuff I never knew I’d like. Plus, when I had satellite TV, I was paying almost $70 a month for basic channels. But I spent 9 hours at work and getting to and from there. About 7 hours of sleep and another 1.5 hours getting ready for work. So 17.5 hours I wasn’t even getting my money’s worth during the work week. Damn. All that money down the drain. Now, I get to keep that dough.

But I’m budgeting with a plan in mind. I know why I’m budgeting and what I’m doing this for.

So, you know what you’re spending now in greater detail. Maybe some of those monthy subscriptions to stuff you don’t really need. Look over all your expenses and see what you do without for your ultimate goal in mind. I’m sure it’s worth it.

August 💵 Money Challenge #1

I thought it was time to bring back the topic of money but in a more natural and healthy way. And there’s nothing more natural and healthy than…

A CHALLENGE!!! 💵💵💵💵💵💵💵

Well, at the very least, nothing as rewarding as a challenge can be. And I’m going to join in and do it too.

So to kick this off starting with the first Monday (and every Monday for the month) in August is budgeting. Dun-dun-dun. I hate that word too. I know how to do it, but I don’t always stick to a budget as much as I would like to. And maybe there are a few of you out there who feel the same. So to get things started, here’s what we’re going to do:

List all our expenses, everything we pay out from rent to our Netflix and Hulu subscriptions. List them and tally up the actual amount we’re spending. If we’re ordering out twice a week, include that too. We’ll go log online to our bank account to get an idea what we’vespent on food outside of groceries if we need to. We gonna do this right.

After we’ve written everything we’re spending, we’re write down everything coming in. And if you haven’t guess or figured it out, we’re going to substract what we’re spending from what we’re bringing in. This is going to give us an idea of what kind of “disposal income” we have.

Now, here’s the challenge: write down what you’d like to save in dollar form from what you’re already spending.

For example: if you’re bringing in $3,000 a month (and no, this isn’t before taxes) and you’re spending $2,500 a month, that means your disposal income is $500. But what you really want is to have $750 a month in disposal cash. Okay. That means you gotta cut back on $250 in your expenses this month. And no, I don’t want you to get a side hustle for this challenge. We’ll get to that in the coming months. Right now,we’re going to work with what we have to save that extra $250 or $100 or $50 or even $25 that will give us a little more wiggle room. The only activity for this is cutting back.

What can you do without for this month?