Earlier in the year, I wrote an article for the YWCA blog.. Here’s the longer, less edited version with all my handy finance tips.
Three years into being paid monthly, you’d think I’d have it sorted by now…. I definitely don’t and still live on tuna and rice for about a week leading up to payday, but I have at least learned some tips and tricks to make it easier to manage on a monthly pay cycle, manage a budget and still save for a house (well, maybe a tap in the bathroom) and put money aside for travel.
We’ll call this Part 1 – if I was to share all my money hacks in one go, we’d probably be here all day. I never write anything too long, as I’m aware that millennials have the attention span of a goldfish, if we’re lucky. So, I hope this is interesting enough to pull you away from the YouTube clip of the cover of Duolipa (is this still relevant???) with a kazoo or, my personal favourite, reading the comments on your local community page.
#1 – The budget
When I think of budget, as most people, I don’t get excited and instead, a sense of unexplained anxiety creeps over me, reminding me of how I managed to spend double my entertainment allowance last month… Fortunately/unfortunately, budgets are absolutely crucial when you don’t earn millions of dollars to spend whatever you want on eating out every night because you cbf cooking. For most people, budgets are crucial to manage the spending and the saving.
The most important thing to consider with a budget is that it has to work for you. I use an Excel spreadsheet based off a template from the ever useful ‘How to grow the fu*k up and act like an adult’ here. This gives you a good foundation of categories you may be spending money on – great for beginners. I just use an enhanced version of this every month.
For the more tech savvy, there is a myriad of budgeting apps. Not going to lie, I haven’t actually used any of them… I’ve tried to download a couple of different ones, but they didn’t work for me at all. But hey, worth a try? Check out some of the recommended ones from Investopedia (sounds legit). Some banks also have good budgeting apps/budgeting tips too and I’m even told that you can get your own financial advisor.
#2- Sticking to said budget
This is undoubtedly the most difficult part of budgeting. You’ve set aside $80 a week for ‘entertainment’ (this is my actual entertainment amount), but there’s brunch to pay for, movies to go to and your friend has just invited you to dinner at the Grill… There’s no way you’re going to be able to do all of these things on your weekly budget. So do you:
a) Say no because you’re super disciplined
b) Put it on your credit card because that doesn’t actually count
c) Borrow from something unimportant in your budget like ‘petrol’, or ‘food’?
Obviously the best answer is a, but this is much easier said than done and temptation is always going to be there. I have a couple of suggestions here. Firstly, create separate bank accounts under your main bank account and name them. Currently I have beauty, food, entertainment, petrol, rent and savings. I have trained myself not to borrow between these accounts and its going surprisingly well. I get paid monthly, so if I overspend on food one week, traditionally I spend less the next week and it seems to work out well. Plus, I never run out of money for petrol, or rent.
Secondly, take out your entertainment budget in cash. I found entertainment was the hardest thing to stick to – I spend a lot of unnecessary money on coffee and gluten free muffins… Having cash in my wallet means I have a finite amount I can spend, reduces temptation to overspend and gives me greater visibility about how much money I have left without logging into my banking app and seeing how much money I’ve spent… Well worth a try!
We’ve only covered budgeting and you’ve already been reading for at least two minutes, which I’m aware is taking valuable attention away from the rest of the apps you’ve got open, so I’ll leave it here for now. Give the budgeting apps a go, be gentle on yourself and remember that it may take several tries to find a system of money managing that works for you. Stay tuned for the next part of my money smart series and we’ll delve into credit card fees, savings accounts and general fun things to stop you from being permanently poor.
Until next time – the modern millennial. *I’m not expert in money, or savings, but I have made a lot of mistakes when it comes to budgets and spending!