I take my finances pretty seriously. I track everything myself, instead of using a system like Mint because knowing where all my money goes is important to me. This also means that at the beginning of each month, I take a good thirty minutes to assess how much I have been paid and where it is going to be spent.
I only get paid once per month, but I imagine if I were paid twice, I would complete this process twice. Also, one important factor to my budgeting process is that I’m a salaried employee so I know exactly how much money I’m getting. If I were hourly, I would budget based on the minimum I would make and just be pleasantly surprised at any overtime.
I have a nice excel spread sheet to track my finances because that is what works for me. I have one page dedicated to the estimated amount of my monthly bills. I also make a list of expenses that aren’t bills but that I know I can budget for. Examples include getting an oil change for my car every few months, setting money aside for a friend’s birthday, and taking my cat to the vet once each year.
Once I have a baseline, I budget for the month. My approach is always to over budget rather than under budget. For example, if my water bill is between $50 and $60, I am going to budget $60 and update the cost once I receive the bill. That way if my bill is higher that month, I don’t run out of money.
Using this approach, I know about how much money I need to make each month in order to break even. If I am over budget, I decide where I can save money and cut things that I can cut, such as less money on groceries or no money for going out to eat. When I am under budget, I can either put that money in my savings account or treat myself to something.
I admit that I’m not always under budget. Sometimes I barely break even, or even have to take money out of my savings account. I keep track of all the money I pull out of my savings account in that same excel spreadsheet so that I can put the money back when I have the chance. I essentially hold myself accountable for any funds I borrow from myself.
With this method, I have been pretty successful at managing money and ensuring I have enough to get by.
