In case you are just joining us, this month is all about Balance. So today we are going to talk about the area in most 20-something-year-old’s lives that needs the most balance.
Cue dramatic music and feelings of dread over credit card bills and hefty Target runs. Ha! But not anymore, because you are the queen of savings! Right? Well you are gonna be after we have this little chat. (Can you tell I’m feeling sassy today? It’s Friday after all.)
Much like my post on saving for an Adventure, we are going to talk about saving, but this time we will include spending and how to balance the two. Sounds easy right? Let’s get started.
Set Up Online Banking
First things first, you need online banking. I don’t care who you are. This is the 21st century, and with that comes perks like not having to stand in line at the bank. I don’t care if you use a secondary company, like Mint, or if your bank has online banking already set up for your account, there are always options. And it will make it a breeze to keep track of your spending. Mint allows you to categorize items so that you can tell how much you spent on gas, groceries, whatever for the month. It also lets you set a budget and will notify you when you go over, which is super handy for those of us trying to cut back. I used Mint for years, but have since switched to my personal bank’s online system, mainly because it is much easier to transfer money between accounts (i.e. put money into savings).
Write it Down
Okay so maybe online banking isn’t your thing. I realize it’s not for everyone. If that’s the case then you MUST learn to balance your checkbook the old fashion way, write it down! Every little purchase should be diligently written if you want an accurate understanding of how much money you have. Though this takes a certain discipline that I never mastered and I fell victim to the notion that “I’ll write that down when I get home” and then forget 5 minutes later. Now that bullet journals are all the rage right now, that can be a super fun way of keeping track of your spending and savings.
Save Save Save
This is a given. If you want to spend, you also need to save. Even if it’s just for an emergency fund. You never know when you’ll need it and you might as well be over prepared. Also, for entrepreneurs like myself, owning your own business also means saving to pay your own taxes. It’s one of the less than glamorous aspects of this whole thing, but it’s necessary. I put away a third of everything that I make into a separate savings account that I am not allowed to touch under any circumstances until tax season. That way I know I’ll have plenty and will hopefully receive some money back. But I also have to save money to make sure I can pay my rent each month, which brings me to my next point.
If you are saving for a vacation, I wrote a post about it here.
Buy Necessities First
I’ve said this before, and I’ll say it again, pay for the things that are super important as soon as you have the money to do so. Otherwise, as people from my hometown would say, “you’ll be up a creek without a paddle”. In other words, you’ll be doomed. Pay your rent, your bills, pay off loans or credit cards BEFORE splurging at your favorite boutique. I know we’ve all been that girl that has gone shopping when she knew she couldn’t really afford it, but at some point that’s not cute anymore, that’s just irresponsible. Once you hit your upper 20’s it’s time to start making some smart choices with your money. And trust me, those cute shoes will look just as good on you when you’ve paid your power bill first.
Set A Budget
I mentioned that Mint lets you set budgets for yourself, but honestly that should be something you at least keep track of in your head. Most people generally know how much gas money they need for the month, or when they should limit how many meals they’ve eaten out. If you don’t know these things, it’s time to figure that out. I think going out to eat is where most of my money goes because I’m too lazy to cook most of the time. But Mike and I have set a budget for ourselves that we are (trying) to stick to. It’s not always easy, but you’d be surprised how nice it is to cut back on some things to make room for better and smarter ways to use your money.
Like most things in life, everything in moderation will actually balance your spending quite nicely. I’m not telling you to put your entire earnings into savings, because I know I certainly wouldn’t do that. Live a little! But also be smart about where your money is going. Again, it’s all about balance.
What are some ways your keep up with your spending and saving habits?