Got your tax return? Time to budget!
It's hard to believe when we're still in the grips of winter, but spring is just around the corner. You know what that means! Yup, it means taxes are due!
Ok that's not very exciting, granted. But it also means your tax return is also coming soon! That's much more exciting.
And, if you're like me, you think every year at tax time "You know, I should really make a budget so I can be smarter about saving." And then I forget all about it.
But not this year! This year I'm gonna buckle down and do some adulting with my money. To that end, here's some tips on on how to be smarter about money.
Make it easy on yourself
There are loads of budgeting apps and programs out there that do the math of budgeting for you. There are a few paid apps, but I like Mint because it's totally free. There's also a nifty app called Zeta which has an interesting twist in that it focuses on budgeting for couples.
Or, you can be like me and open up Excel and plop a premade template into it. Microsoft has scads of templates available on their site, many of which are completely free, which makes sense because you're, you know, budgeting.
Get your stuff together
Seriously. Do this first. Trust me. Gather all your slips and statements and whatnot before you start planning your budget. It's super annoying to forget a key expense because it was buried under a pile of papers in a box in your closet.
Figure out your monthly income
If you're employed full-time, this part should be easy. Grab a pay stub and use your monthly net income there. But, and this is a big but, if you got your side-hustle going, don't forget to include that income too.
List your monthly expenses
This is exactly what those apps and templates I mentioned above are good at. Plenty of fields to list your expenses like:
- Gas or public transportation fees
- Non-essential shopping
Then with those expenses added, figure out the limit of spending on each. For things like rent or other fixed expenses, that's easy. But for variable expenses like food or entertainment, take an average of three months' worth of expenses and use that as your limit.
The 50/30/20 rule
Ok, you've got your income, and your expenses. Now it's time play around. What's the 50/30/20 rule about? Simply put it's the theory that 50% of your budget should account for your essential expenses, 30% should account for non-essential expenses, and 20% should account for savings and paying off debt.
Now stick to it
This is the hard part. There's no point in making a budget if you don't stick to the plan. That's like ignoring your diet and then getting surprised when you gain weight.
Does this mean your budget is iron-clad and immovable? Not at all. It just means you'll be able to better judge how and where you can save, or how much wiggle room you have to buy those big ticket items. By budgeting your money, it gives you control over where and how you spend money. That's a good thing.
Of course you can always save a chunk by ditching your phone plan and moving to our free Nationwide Talk & Text. Your budget will love you!