Obviously the most important part of this post, right? An Excel spreadsheet keeps my budget orderly. Excel is awesome because you can set up functions to do all the math for you. So if you have a slip up here or come across some extra money there or if bill amounts change then it's no big deal! I'm going to paint a little visual picture for you of what it looks like (sorry no picture...that's a little TMI). I use the A column for my pay day and just go down the cells for every pay day of the year. Next, for column B, is my rent column. I plug it in to the closest date that rent is due for the pay days that I have. So for example, my rent is due on the 1st of every month, and I get paid March 28th this month. So, on my sheet, I have listed the amount I owe for rent in that row. However, when I get paid again on April 11th, rent will not be in that pay out row because I will get paid again after that, which is closer to when my rent is due. And so on and so forth for all my other bills (utilities, credit cards, student loans, car loan, cell phone, gym, etc). Then after all that I have a column for how much spending money I'm going to allot myself for the two weeks until I get paid again and also any extra expenses that may come up that don't happen very often (trips, gifts, car troubles, etc). At the very end is my savings column, which if you set up as a function to subtract all cells from that pay out row and then I get the leftovers to put in to my savings account. Sometimes it is a huge number and sometimes I have to take money out. It all depends on when stuff is due or what is going on in life. But this way I can visually see where all my hard work is going. You can also set up another function to add that entire savings column together, so you can see where you will be paycheck to paycheck and at the end of the calendar year.
2. Balance your savings vs. your debt
Some people like to just pump all their money in to their debt to get rid of it so later on they can be "debt free." I don't believe in that. It might work for some awesome strong willed person who will never use their credit cards again or take out a loan for something, but that person is 100% not me. I like to have a healthy balance of savings and paying off my debt. As a college graduate, I have a A LOT of debt. We're talking credit cards, student loans, and a car loan. For being 23, I sure do owe a lot of money to a lot of places, but it's okay. No need to panic. I like to use extra money that comes in here and there to pay off big chunks of my more important debt. I recently used my tax return to pay off my major credit card I have because I am looking to transfer/open a new credit card, since the one I have now was my very first one and has no perks to it. However, that is not something I would do to pay off a retail card because guess what? I'd probably go on a shopping spree with my available credit that I just paid off. No bueno. As for my car loan vs. my student loans, I'm paying my student loans off like crazy. I was fortunate to have some help with paying for school, so my student loans are quite manageable. I started out with the minimum payment and upped my payment by $50 at the start of the new year. I will continue to do that every year until it is paid off. This way I save on A LOT on not paying all interest. However, I have decided to not do that with my car loan. The minimum payment in my opinion is the perfect amount and the interest rate is better than my student loan rate. It's not a very long term loan, so paying the minimum and saving a some extra dollars every month to me is better. It might sound dumb to want to save more now and pay more interest than to just pay all I have, so I don't pay very much interest, but what if my car breaks down, and I have to shell out a pretty penny to get it repaired? That's what my savings is for...along with a few other important life events that may spring up in the next few years :)
3. Start a 401 K
SUPER IMPORTANT. I know we're in our 20's and retirement is a long way off but we're talking about what you're going to live on when you have no job and are living the high life. People say how they want to retire and travel the world or do this and that, but with what money? It's called your 401 K. Of course, you can sell your assets and live off of that, but why not start now with just a little bit of your money set aside in a private account that you can't touch and will earn interest? If you start from the beginning you won't even know what you're missing. And I promise you it's not a lot each paycheck, but when you're 70 years old, it will be A TON! I personally have my 401 K increase 1% every year until it reaches a certain mark. With yearly raises, you won't know the difference when your 401 K increases this way. This is one of the smartest things we can do for ourselves now. Trust me, in 50 years you'll look back and say, "damn that Yellow Mondays gal was right, I'm living the good life now!"
4. Don't use credit cards
Obviously if you have to for an emergency, okay, go for it. But to buy lunch on it and then not pay it back on the due date is not smart. This is how things get out of control. Pack your lunch if you don't have money in your checking account to go out for lunch. Some credit cards have great perks and if you use them you get money back or great deals on airfare, but those cards are meant for you to purchase items with it then pay the entire amount back when the bill is due. This is coming from someone who loves to shop and had a lot of credit card debt. It feels better to have a better credit score, so I can buy a house later this year than to have that cute pair of pants from J.Crew.
5. Be frugal and have fun
Turn off the lights in a room that you're not in at home. Dress for the weather inside your home for when it's cold or hot so you don't have to blast the air conditioner or heater. Buy only what you need for the week at the grocery store. Oh and NEVER EVER EVER go grocery shopping on an empty stomach. Make a shopping list for the store and stick to it. When you're at the mall don't buy something from every single store you go in to, maybe just a couple stores. If you're more aware of what you spend your money on, the more money you will have. That extra $20 you save in utilities a month can go in to your savings and over time you can use that money to plan a fun trip. That shirt that you didn't buy at the mall can go towards having a fun lunch with a great friend that comes in to town to visit you. Spread your money out and have fun all the time, not just one day every other month.
Those are the 5 budget friendly staples I like to stick to. Now they are not for everyone, so please keep that in mind, but if you've been feeling lost in the financial tornado of life or you're completely freaked out for what will come next after graduation, here ya go. Questions, comments, suggestions are always welcome! Happy savings, friends!