You have been in your new responsible and budget conscious lifestyle for a week. How is it going?
Maybe you’ve checked in and tracked your spending every day this week. Or maybe you budgeted on day one and then closed all tabs and kept wanting to go back, but didn’t. It’s OK! It’s only been a week. Back to the budget train.
A week after starting my budgeting experience, I remember panicking. I kept opening up my budget and looking at it. How was the little money I had left supposed to help me? Assigning him didn’t do more. I felt extremely self-conscious about every penny I spent, knowing that I should be responsible to myself and my budget.
You are making a major change in your lifestyle. Feeling a little stressed, confused, or overwhelmed can be a very normal part of this. I went through it and so did you.
Last week we made a budget. (If you missed it, check it out on latimes.com here, or search your inbox for “Really Worth It”. And if you’ve seen it but haven’t finished setting your budget, Now is the time to do it! Having that budget in place is the foundation for the next few weeks.)
Today, let’s talk about maintaining a budget.
Budgeting versus maintaining a budget
I wish doing the budget was the beginning and the end of the process. Hooray, I’ve jotted down all of my ambitious spending numbers, I can definitely cross “budget” off my to-do list! But it’s a journey, not a one-day destination.
Day-to-day budgeting is about tracking your spending, comparing what you spent with what you said you were going to spend, and moving the money around as needed to make sure there is enough to cover everything.
You have a week of spending under your belt. What did you buy ? What invoices were due this week? Has the rent check passed? Go into your budget and make sure all of these amounts are subtracted from their relevant categories.
If you got paid again, allocate the money from that paycheck. I start by budgeting for the necessities – the things the paycheck has to pay between now and when I’m paid again. For a big monthly expense, like rent, I split it over the two paychecks I received each month, so I didn’t pay the full amount in one influx. So if your rent is $ 2,500 per month, plan twice for $ 1,250 in the “rent” category.
Next, review the bills and debt payments coming up over the next two weeks that you haven’t yet covered. If you have purchased groceries, you may want to complete this category. Ditto for gasoline for the car and restaurant meals.
I run my life on my Google calendar. So whenever I allocate amounts in my budget, I check it to see if I have anything for that pay period that might need a little extra financial attention. Is it mom’s birthday? Make sure to set aside a little extra for a gift. (Give her something cool. She’s your mom.) If a friend is coming to town for Martin Luther King Jr. Weekend, have extra to go out for dinner.
A lot of people are generally opposed to the budget because they think it should be rigid. If anything, it’s the opposite. You will always have unforeseen expenses. Again, you are the boss of your money. When one of your departments is overwhelmed, you allocate resources from elsewhere to help cover it.
So if you absolutely blew your fun budget at a Sephora post-holiday sale, or if your modest car repair budget was exceeded when you rolled over a nail, that’s okay! You just need to figure out what dollars are going to flow and help out. You may need to be more frugal with your groceries over the next couple of weeks, or skip your usual Friday night follies with postmen, or take some of the money you had set aside for the trip to Mexico than you planned for March.
You don’t screw up your budget if you overspend. Excessive spending is part of budgeting. Succeeding in your budget means adapting to it and telling yourself to continue. Here, I’m doing it for you: keep going!
How to budget with a partner, roommate or family
If you are married, live with someone, or in a multi-generational household, can you budget for more than one person? Yes. With one big caveat: they must be on board.
The main change is that you have to determine your priorities together. Maybe you don’t care at all about having more than one or two basic streaming services, but your partner really appreciates what’s on some of the more specialized ones. Your mom might happily cook the same for every meal for the rest of her life, but you like to experiment and want to prioritize the CSA monthly box in your grocery category. These conversations can be very difficult to have, especially since so many marriages and families are struggling with money. As with any difficult part of the budgeting process, I’ll remind you that it will be worth it in the end.
If they have no interest in budgeting, well, that’s going to make it more difficult, but it’s doable. I would say focus on what your paycheck needs to do, including your share of shared bills, and the budget for those things. Ideally you will lead by example and in a few weeks your roommate will accept your offer to teach you how this budgeting software works.
Another frequently asked budget question: what’s a fair way to share expenses with another person? Like so much in budgeting, there is no one right answer. Some couples share all the expenses 50/50 and the rest of what they earn is “fun money”. Some choose to divide things by income: if your spouse earns twice as much as you, he pays 67% of the expenses and you make the remaining 33%.
Here’s how I did it: My husband and I earn roughly the same amount of money. When we first got married, we had a joint account for shared bills and expenses, which we shared 50/50, and paid for everything “just ours”, including debts such as car payments, from our own personal accounts. In 2013 I was made redundant and we switched to a combined account for almost all expenses except for a predefined amount of “fun money” which is deposited into our private accounts.
Today we still use this model. The joint account is for shared bills and expenses, shared experiences (vacations, restaurant meals, tickets to museums) and pre-agreed items such as “we both need new” nice “shoes before. vacation this year, so let’s budget x each for those Fun money is made up of video games, most of the clothes, doing things separately with friends, and the majority of online shopping. I don’t even keep track of our fun spending on the main budget – his money goes to his account, and what my husband subsequently impulsively buys from a targeted Instagram ad is none of my business.
The most important thing isn’t how much you both choose to budget for things. It is the willingness to talk about it openly and honestly. The most important financial choice you will make is who you marry. That doesn’t mean “don’t marry a broke person” – my husband and I were both super broke when we got married! – it means “don’t marry someone who is totally reluctant to talk about money stuff”. My idea was to budget, but my husband was in on it. If something happened that we wanted but couldn’t afford, like, “Hey, is there money in the budget to have pizza delivered tonight?” ” “No.” – it wasn’t me to “be mean” and say no to him. The budget is something that we have worked on and agreed to. Achieving our long-term financial goals were our shared priorities, not just mine.
What if my expenses were more than my income?
Personal finances are not magic. If you have more exits than entries, your options are to earn more or spend less.
For starters, see what expenses you can cut right now: subscriptions you don’t really use, something you can maybe put off purchasing for a few weeks until you get paid again. Small changes might be enough to break even. As you pay off your debt, your monthly minimums go down, freeing up a few more dollars here and there to allocate. And when you repay a debt, this monthly payment disappears entirely. We’ll talk more in a future newsletter about ways to spend less money and reduce your debt.
If you still can’t find a way to make the numbers work, consider more comprehensive options: reassess whether you can afford the rent where you currently live, or trade in your car for something cheaper, or find a roommate, or find a side job or a second job (Kathy Kristof’s SideHusl articles are a great place to start looking for ways to earn a little extra and more.)
If you can’t add the numbers together without having to make some tough decisions or incur the necessary spending on credit cards or pay a late bill, don’t give up. High housing costs and onerous debt affect the quality of life for many people in America. It doesn’t mean that you failed to budget or that budgeting can’t do anything for you. I designed this newsletter course to get you in control of your finances over eight weeks. No one will have understood everything right away.
Next week, we’ll talk about taking stock of your spending and finding ways to reduce your bills and expenses. Until then, commit to keeping your money as it comes in and out. You got this.
This newsletter is free. But doing it is not. Totally Worth It won’t have any sales pitches for specific financial products – that is, I’ll never tell you that you need to buy that specific software or open an account with that specific bank. My only selling point is this: if you aren’t already, consider subscribing to the Los Angeles Times. $ 1 for six months. I promise I can adapt it to your budget.
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