Money

Budgeting 101: My Golden Rules

Happy payday (someone’s getting paid today)! Whether you’re paid biweekly, semimonthly, monthly, quarterly, annually, etc. there is a routine that you should adopt in order to keep your finances organized. Each week of payday, I follow a routine that keeps me up to date with my bills, knowledgeable of all my income, and on track with my budget. Hopefully, my routine will spark something for you to make some adjustments to your financial routine. Also, if you’re looking for ways to become better at budgeting, try my online course on Udemy.

Create and revise your budget

I always take the time to write out my budget before payday. If you are not salaried, a great way to track your hourly pay is through Paycheck City. I love using their tool because the expected taxed income is always accurate. With that, I list all of my bills and budget areas that I plan to cover that check. Most importantly, I compare my budget categories to events I have coming up in that pay period. This way, I am prepared to cover any expenses associated with them well in advance. After the initial budget draft, I am always tweaking it up until payday based on new plans, changes to savings goals, or unexpected expenses.

Check your account and adjust your budget

The morning of each payday, I check my account. I know this seems unnecessary but there’s a method to my madness. I’ve had a few occasions where payroll was not set up properly for my direct deposit. Consequently, my paycheck was not deposited into my account or the amount was incorrect. Checking your account will save you a headache from finding out too late if something is wrong!

So, the first step is to verify that the money is there! I also check my paycheck stub to make sure the numbers match. Especially in jobs where commissions are earned, I want to see where extra funds came from. Once these things are verified, I take a final glance at my budget and adjust accordingly. One great financial tip that I try to stick to is making sure all my funds are accounted for. If there is a balance after covering all of my expenses, I will add that amount to my savings budget or personal spending budget. Allocating all of your funds discourages any deviation from the budget in fear of overdraft. (Sometimes you have to play the mind tricks to stay disciplined).

Manually post payments

After verifying my funds and solidifying my budget, it’s time to pay off these bills! Despite the conveniences, I opt out of automatic payments for most of my bills for a few reasons. 1) I want to personally track the fluctuations in my monthly payments. 2) I do not pay my bills on the same day each month based on my payroll schedule. 3) I want to closely track money in and out of my account for personal recording and fraud prevention.

Manually posting bills gives me complete control over the bill pay process. I still receive paperless bills and complete the same steps online. However, I avoid automation. The only automatic bills I have are subscriptions and autopayments with discount incentives. I monitor these closely and always keep them accounted for in my budget.

Set aside savings

Savings is such a crucial part of financial health, not to mention all the things it provides for long-term planning and security. I try to save around 10% of my income per check. There are times I’ll cut back but still put money away. I made a point to make this its own step because I am learning the true benefits of saving. Being able to take trips, buy a car, and move between states within a few short months were all possible due to my saving habits (and good timing). I place my savings into a separate account and make sure to track this before allocating any spending money for myself.

Set aside spending

Lastly, I set aside my spending money. As I said earlier, all money is accounted for in the budget. So at this point, I should balance out to $0 in my account (not including the carryover personal money from last month). At this point, it is simply a mental “set aside”. I track my frivolous spending weekly to ensure I am within budget. Sometimes, I adjust my budget further to make sense of the money I have left.

Track payments on next business day

Since most of my bills are paid on Friday, none of the payments show up in my checking account until Monday or Tuesday of the next week. Again, in an attempt to prevent fraudulent activity and to track my own activity, I check my account once on Monday and Tuesday mornings for the charges.

Another reason to double check deposits and charges (or withdraws) are to double check your own errors. I have had instances in which I set my payment to a future due date instead of the intended date. In that case, I had to make a mental note to not spend that “extra” money until the payment clears. Sometimes checking for that human error will save yourself a headache.

Check your budget the following week

With all necessities covered, I am able to finally look ahead. I tend to overspend the weekend after payday. So the following week, I check in with my budget to see how much I have for gas, food and events/activities that upcoming week. By further itemizing my money, there is less likeliness that I will overspend in one week and fall into the vicious “living paycheck to paycheck” cycle.

Do It Again

Going into the second week, I begin to plan my next budget and we start all over! I have found these small details to be helpful and really keep me on track with my budget, keeping up with bills and maintaining a decent balance in my account at all times. Other things I do to stay organized are keeping folders in my email for all statements and payment confirmations, periodic debt tracker worksheets to get a snapshot of my bills, and my Google Sheets budgeting workbook. You can get access to the budgeting workbook and step-by-step instructions on how to customize your budget in my online course.

Basic Budgeting Strategies with Google Sheets helps you identify your money goals, teaches you how to budget with my workbook, and provides helpful money management tips all in 1 hour of instruction. Learn more and sign up here!

 

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