![]() You should consider making a major change to your lifestyle if one of the following scenarios is happening: Now while you're coming up with your mandatory spending list, keep in mind that there are rules of thumb. ![]() This means if you can't afford it, cut it. Anything that is not related to safety or survival is discretionary. These items are discretionary, and belong in Step 4. ![]() Electric, Natural Gas, Water/Sewer, Internet.The next step you should take is to subtract all of your spending that you can't cut. All of your "bonus" money should go toward Step 4. Using this method-whether you're bi-monthly, weekly, or bi-weekly-you're earning on thirteen months, while spending on twelve. Bi-weekly, you get two or three "bonus" checks per year. If you're weekly, you get four "bonus" checks spread throughout the year. So what does this mean? If you're bi-monthly, you get paid a little more than you expect a month. Only base your monthly income off of your minimum, guaranteed income. You are assuming the worst-case scenario, which will happen at least once a year: February. In fact, you just calculated a year to be only 48 weeks long. You probably noticed that you're missing a couple of checks, or at least part of your checks. If you're bi-monthly, you might want to grab your February pay stubs or a calculator and see what 10 workdays of pay looks like, then multiply by two. This means if you're paid weekly, your monthly income is based on four paychecks. ![]() For those of you who don't have Excel, there is always free office software out there.įirst thing you want to do is budget out for four weeks of take-home (after-tax) pay. Everything is manual, but you will have control over tracking your own spending in your own way. YNAB requires that you manually enter your spending, which some claim as annoying, but others claim that it helps with self-control.įinally, there is always the simple spreadsheet, or even a piece of paper. It's a free trial for the first month, and $60 for the full suite. There is also You Need a Budget, which is a favorite of those who want something more hands-on than Mint. My only gripe is that the Categories can sometimes be a hassle, but free is as free does. It does this in a completely safe and read-only manner. Mint automatically tracks your spending and updates all of your accounts by downloading all of your online transactions. It's my personal favorite, and it's free. There are three flavors of software I often recommend.įirst pick of the litter Mint. So let's get started, in five easy steps: Since we want to avoid debt, and since your income is probably set in stone, regulating your spending is key. Times where income minus spending is negative, you have debt. Times where your income minus your spending is positive, you have savings. You're living in a world where basic arithmetic makes sense you earn an income and subtract your spending. The biggest rule to balancing the books is to live below your means. If you haven't started yet, you'd be crazy not to. And here's the wildest thing about them: they only take mintues to set up shorter than the time it takes to read this post. In fact, I would go as far to say that trying to make ends meet without a budget is like trying to drive a car without a brake pedal. They will show you, clear as day, where you can start saving money. They allow you to keep a modicum of self-control on your spending. Not only do they make finance nerds happy, but it's essential to your financial health. No matter how you preface it, this is the first thing I will say back when you ask me for advice: show me your monthly budget.īudgets. You lost your job and took a pay cut to work retail. You're just graduated college, and you're 100k in debt. Here, please treat others with respect, stay on-topic, and avoid self-promotion.Īlways do your own research before acting on any information or advice that you read on Reddit. Get your financial house in order, learn how to better manage your money, and invest for your future. Banking Megathread: FDIC, NCUA, and your cash.Private communication is not safe on Reddit. Scam alert: Ignore any private messages or chat requests.
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