Recently my income changed from grossing $2300/month to only $1600. (I started grad school). I live in a suburban area in California, so on $2300 I was comfortable but not living the high life. $1600 is VERY uncomfortable, but manageable. I want to share my new budgeting strategy to account for this big change, but also to help anyone who is in a similar situation. I scoured the internet looking for something similar, with no success, so hopefully this is useful to someone.
The last few months were a serious adaptation for me from my "comfortable days," and I withdrew too much from savings. Any withdrawal from savings is "too much" for me, so even though my savings is down $700, I see it as a greater loss, because I also lost what I would have gained had I been more disciplined in my spending.
To help keep to my budget, I set 3 goals. (1) Rebuild my savings (and then some) by 2020, (2) Pay off my credit cards, and (3) Save a little extra for travel ($50/mo...$600/yr).
Below is my bare-bones budget. I broke spending into very general categories for simplicity. Beneath I will explain what's in each category, and why I designated each dollar value to them.
______________BUDGET_______________
Bills...............................................$800
Groceries.....................................$200
Dining..........................................$100
Gas/Transportation....................$100
Entertainment..............................$50
Shopping.......................................$50
Savings.........................................$250
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Total...........................................$1550
Bills: I consider bills to be any expense that I'll "get in trouble" if I don't pay (i.e. someone will come looking for me).
My bills are: Utilities $125 // Car insurance $160 // Phone $57 // Subscriptions $15 // Gym $26 // Pets $80 // Credit cards $350 (total debt $2300, at this rate, both credit cards should be paid off in about 9 months)
- You might notice that I don't currently pay rent. I'm really lucky for that. If I did have rent, I'd be renting a room at about $400/month, and to make up for that in my budget I would pay off my credit cards less aggressively, slash the dining budget, and put less into savings until my credit cards are paid off.
Groceries should be self-explanatory.
Dining: Any eating out, coffee, road snacks, etc.
Entertainment: Movies, going out for drinks, pedicures, etc.
- You might notice that I am not being as strict as I could be with dining and entertainment. I budgeted for those because those expenses tend to be time with friends, and if I have to say no to myself in those situations, it's more stress to me than it's worth. It makes me feel really poor and sends me into an anxious spiral because I grew up poor. So, to make up for that in my budget, I'll be really strict with shopping in the coming months. The $50 per month I've allotted is for bare necessities like shampoo and the like. This benefits me two-fold, because I'm trying to be less of a consumer and more of a minimalist.
Gas/Transportation: Also self-explanatory. I drive a Prius, so even though I commute a bit, gas is cheap for me. Parking is also factored into this expense.
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My total budget is less than my monthly income! There's a couple reasons for this: First, there's often some monthly spending that goes unaccounted for and I wanted to leave a buffer. And second, this is to hopefully save a little extra for my annual expenses. Make sure to consider these in your budget so they don't surprise you later and instead you can prepare for them.
My annual expenses are: Amazon Prime, computer antivirus software, and car registration. Another common one would be property taxes.
Best of luck to you in your budgeting endeavors!
December 31, 2018 at 03:27AM
