This has been something I've wanted to cover on here for quite some time. It has also been one of my most frequently asked questions, which, is so odd yet so awesome. My parents will throw their fists in the air with pride when they see this like, "hell yeah! we fucking did it!". Allow me to explain how I personally budget my money and have successfully never been late on bills or rent in YEARS. Keep in mind, I am no accounting expert, this is just the shit that works for me.
Let me take you on a field trip, which unfortunately involves numbers EW, but hear me out...
I was introduced to this budgeting app called Good Budget in 2011 and I haven't looked back. Keep in mind, there are tons of other budgeting apps similar to this, I am fully aware, this just happens to be the one that I use and would recommend. It takes a good minute to set it up, but once you have everything put in place... it's easy as pie. I never really understood that reference...
First things first, download the app. It's free, hell. yeah. The icon should look like this little dude. --->
Once it's downloaded, put your phone down and hop on the computer (real quick, JUST REAL QUICK) and go to www.goodbudget.com. Set up an account, again, fuckin' free. From there you will create "envelopes" which represent your monthly expenses. For example: I have an envelope for my Phone Bill, Car Insurance, Credit Card Bill, Health Insurance, etc etc. Whatever you pay for on a weekly, monthly or yearly basis, make a friggin' envelope for it.
Personal preference: Once you do the things, create an envelope called "Spending" and one called "Savings". These, obviously, represent spending money and your savings. I personally don't have a separate savings account, I just have a virtual one that lives in my mind. If you have an entirely separate Savings account, then there's no need to create an envelope for it .
Next, figure out how much you get paid monthly at your job. Whether you get paid once a month or twice a month or every week, it doesn't matter, it all works.
Wait until it's your pay day to start this process, it's much easier and less confusing I promise. Let's say I get a paycheck twice a month for $1000. Let's click "Fill Envelopes" and get ready to create a quick fill. Don't worry, I'll explain this weirdo lingo. This is basically saving the settings that you're about to make so check the box that reads "Remember Quick Fill As..." and name it whatever the hell you want and begin.
Step 1. Enter in your paycheck amount. For this example, it's $1000. The Payer can be whoever as well, whether you want to name it Paycheck or not is up to you.
Step 2. This is where you're spreading your $1000 around to all of your bills. For this example, I get paid twice a month, therefore, I need to cut all of my bills in half. I have a $300 car payment, therefore, I take $150 from this paycheck and $150 from the next paycheck to equal $300. Easy math. Even if you get paid every week, just divide your bills by fourths. Make sure you also take into account WHEN your bills are DUE to make sure you have enough money in your envelope by that date. This is important.
Once you're done with the important stuff, you'll see off to the side there's a little box talking about sweeping. Step 3. This is any money from the original $1000 that didn't get put into an envelope. Your last nights leftovers basically. Sweep that shit into spending, savings, wherever the hell you want it to go.
After these 3 steps, you're done. It's saved. Whenever you get a paycheck, all you have to do is refer to your quick fill and all of your bills will be accounted for and whatever is left is yours to spend or save. It's seriously such a fool proof way to make sure the important stuff is taken care of before you go spending money on shit that makes you happy. I've trained my brain over the years to literally only see what's in my spending or savings as WHAT I HAVE and ignoring every other number. I no longer look at how much I actually have in my bank account as a whole because it's really not there. In my mind it's already spent. It's gone. Bye.
I run into too many people, Spencer being one in the beginning, where they get their paycheck, "sweet $1400!" and boom it's gone and they are left to scramble for bill money at the last minute and constantly over drafting their accounts. Ever since I started this method and kept myself in check, I have never had a late payment on a bill nor have I ever had to scramble for money last minute.
I can't even believe that I'm sitting here writing about fucking budgeting but god damn, it has saved my life. I have successfully converted Spencer to the process about a year ago and he hasn't had one late payment since. He can vouch.
So hey, I know adulting is tough as fuck and we're all basically wingin' it in life but I wouldn't be sharing this information if I didn't think it would be helpful. It is absolutely possible to not suck at budgeting, I am living proof, I used to be terrible. I hope my explanation wasn't too confusing, I swear it's easier than it looks and once you get the hang of it... you're solid, man. You got this.
Go out into the world and fly, fly away from over draft charges and pissy landlords. I hope you all learned something cool today, no matter how nerdy it is. xo
P.s. This blog post is not sponsored by GoodBudget, they have no idea who the hell I am.