Post-Grad’s Guide to Creating a Budget

Post-Grad’s Guide to Creating a Budget

Once I started my job I knew I had to create a budget. I have bills to pay, but also want to put as much away in savings. This isn’t something we’re taught in school, which makes absolutely no sense in my opinion. Money management is one of the most valuable life tools you could have. So from one broke post-grad gal to another, I wanted to share my own tips and experience on the matter.

What’s great, and frustrating, about budgets is that they can be easily personalized for everyone. In this post I tell you the types of things I fit under each category, but it’s more than likely it will be different for you. If you want to create a successful and realistic budget, you need to take a good look at your spending habits. It can be hard to be honest with yourself in this way because you may feel embarrassed or irresponsible. I get it, I felt that way about myself in this situation. But confronting this head-on and actively making changes has made me feel so much better- and I promise you will too!

This strategy is based on a monthly income. I think this works best if you have a salary/steady income. If it fluctuates on a weekly basis it may be a little harder to come up with a concrete monthly plan, so evaluate what works best for you. I’ve included a graphic at the bottom of the post with a summary of my tips for your convenience!

 

How My Budget Has Helped Me

Budgeting has made me become really conscious of my spending habits, which I think is important to start at a younger age. Learning to become aware of the value money has in your life is a lifelong lesson and one of the most important. I find myself investing in overall better quality in terms of clothing, shoes, and health/beauty. It’s helped me curate my style and figure out what I truly like and pay attention to what actually works. I’ve also been able to really build my savings and plan for when I’m in the position to move out and live on my own!

 

1. Determine your financial/life goals

You won’t accomplish anything if you don’t have something you’re working towards. This is very personal and varies for everyone. It can be related to funding your first apartment, taking a big trip, buying a new car, or something else major. Write it down and put it in a place that you can see it every day so you never forget what you’re working towards. If you’re up for it, put together a vision board to better visualize and manifest what you want.

 

 

2. Figure out what you make monthly

As I said in my intro, this strategy is based on income on a monthly basis. This is the most realistic way to handle money because most bills are paid monthly, so it’s easier to budget and break down what you’re earning. Do whatever you’re comfortable with and according to what you make per month. If you do something that causes your income to fluctuate, such as nannying or waitressing, try your best to estimate what it could be. To be safe, go with your lower estimate that way you aren’t expecting to have more money to use than you actually do.

 

 

3. Figure out what your essential expenses are

I considered essential expenses rent/utilities, car payments, credit card bill, cell phone bill, groceries- things you can’t live without. Most of these will fluctuate mont-to-month. Give yourself a cushion and be prepared to allot more money to these things just in case. If you end up with leftover money, you can then use it to your discretion. For example, groceries for one person can cost $50 one week and $60 the next week. Give yourself peace of mind budgeting closer to $60/$65 per week so that if you do go over, which is super easy to do grocery shopping, you have room in the budget and won’t be dipping into other places for the money.

 

 

4. Determine the minimum amount you want to put away in savings

After you subtract your essential expenses from your monthly income, you have a chunk of change left. I highly suggest NOT spending it all at once and putting away into savings. The reasons for having a savings are obvious (to me at least)- it’s there for an emergency or large purchases. You never know what life is going to throw at you, and it’s best to be prepared. This is also where your initial financial goals come into play. For example, if you’re saving up for a new car, having a set amount going into savings every month actively going towards that goal will guarantee you’ll achieve it. For me, I’m saving up for an apartment and furniture, and this motivates me to put as much away in savings as I can.

 

 

5. Secondary Expenses

After you organize your essential expenses and savings, you’re ready to budget for anything secondary. Generally this means products or items you use up and need to be replenished. For me this includes my personal care/beauty products, Hulu, Apple Music, etc. These aren’t technically essential but if you want it you need to pay monthly. This can also include maintenance products for your home, kitchen supplies, your gym membership, medication, etc. I can only list so many things that would fall in this category because I don’t know YOUR personal spending habits/overall life needs!

It’s important to note I don’t put makeup such as new eyeshadow palettes or new lip glosses in this category because that’s more for fun rather than a necessity.

 

 

6. Leftover money

Whatever money you now have leftover is up to your discretion! This is something you should coincide with step 4. Be honest with yourself and how you spend your money. I’m a recovering shopping addict, so I know how tough it can be to cut back. Unfortunately for most of us not all money can be fun money. It’s important to make sure your living a lifestyle appropriate for what you’re earning and what your goals are. I budget for clothes, shoes, fun makeup (as noted above), going out, eating out, etc. in this category.

For some it’s not necessary to budget every last dollar in this category to a different aspect of your life. Personally I don’t because I don’t tend to overspend in one area. If you do overspend, it may help you to put a cap on that area of your life so that you naturally learn how to cut back.

 

 

Some Food for Thought…

A big tip I read on Twitter once from James Charles (random I know but I adore him) is that if you can’t buy it twice you can’t afford it. You should be able to replace the money that you spent so that it doesn’t hurt you. I feel like this more so applies to bigger purchases because they impact your finances on such a grander scale; I’m sure a majority of us can buy ten iced coffees (not that we should) but a new laptop would hurt our finances more.

Recently I’ve set up the budgeting app Mint. The budgeting part of the app has been a little confusing to figure out, but I like that it syncs up information from all my open accounts. It also automatically updates your credit score monthly and tells you why you have that score in a language I can actually understand. I don’t suggest using this as a replacement to creating a manual budget as I think it’s important to physically write down and have that deeper level of awareness.

If you mess up and spend more than you should in one area, don’t beat yourself up over it. Learn from it and keep moving along! Go into this process with the expectation that you will mess up every here and there. Don’t expect to be perfect because that’s just not real life! Spending a little more on clothes or going out one month won’t kill you- just don’t make a habit out of it.

 

Creating a budget makes you a smart consumer (find that post here) and will only help you in the long run. Leave a comment down below with any money-related tips you may have!

 

budgeting, how to create a budget, money management, millennial, generation z, money advice, tips, help

 



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