Mindset of Budgeting
When you think of budgets, do you take what you already make and then figure out how much it will buy?
Or do you come at it from the other direction? Start with what you have to buy and then figure out how much take to get there?
Personally, I hate budgets. They’re rules that I have to stick to and I find reasons to not.
Which with money, isn’t a wise decision.
So, I take it from how much I have to spend, how much I want to spend, and then I look at how much I want to save.
Becuase yes, saving money is important but food on the table is a now kind of thing.
The easiest way to do it is to list off the stuff you have to buy:
- Insurance (Home, Renters, Car, Health, etc.)
- Monthly Expenses (Internet, phone, Memberships with contracts, etc.)
This order works really well to figure out if you’ve missed anything.
Note: This doesn’t have groceries because it’s a variable expense that evens out over a longer period.
My numbers for this come out to $1600. This covers my rent, insurance I’m required to carry, and any loan payments.
This is the variable spending category, this the stuff that you spend an average amount on– like groceries and gasoline and such.
Look at your credit cards, your accounts and other such you use to pay and see what your total comes out to. I use my credit card to pay it every month because I was tired of trying to sort it out in my bank account. I also like getting points for spending money (this feeds my album collection)
- memberships (Netflix, gym, etc.)–this is the stuff you can cancel without penalties.
Because of my job (Uber driver) my gasoline consumption looks ridiculous but think about how much a trucker spends and realize that I spend less.
But all said, I don’t currently have any memberships. My apartment complex has enough of a gym I can use, I don’t have a TV (It was sacrificed in the move) so I don’t have Netflix, and I only have 2 ‘memberships’ for work.
My monthly total to budget for is $800.
So that brings the current total to $2400.
Let’s be honest, savings is not the first thing people think of when they plan a budget. But usually, they are coming at it from ‘this is what I have’ than the ‘this is what I need and want’ directions. I personally think that a 20% savings/backup money is a good gauge of extra. This is after years of figuring out my expenses and seeing what happens when I go over and how much that is.
But I like more math problems so here is one.
$1600 + $800 = 2400 + .2(2400) = 2880
This is how much I need to make in a month. A four week month specifically. Becuase everyone knows February always feels short because it is.
So, 2880 / 4 = 720
I need to make 720 a week to make this budget and still have money left over.
Being an Uber driver I get the luxury of going home when the budget is met, so I end up bribing myself with fun things when I make base budget.
Becuase why settle for less if you can make more. So I bribe myself with going home early on Friday if I’m on pace to make $750 for the week by Thursday. It usually ends up being a pizza night at friends’ houses and that costs me 5$ in contributions.
Either in alcohol or cheese. Mostly cheese.
But what happens when it’s been a good week and I’ve already made tomorrow’s goal before I even start the day? (Because I break it down to how much a day I have to make).
Using the math
The whole goal of working Uber is to make enough money (in less than 40 hours) so I can devote my hours to blogging, making other money, or just enjoying life. So for me, I need to make $20 an hour (preferably more) to make my expenses work.
I paid my dues in college, pulling the 15 credit hours, 40+ work week, and god only knows how much I spent on my homework and studying. I don’t want to be working a 60-hour week. Now, does that mean I should be sleeping 12 hours a day because I don’t want to get up?
Not really, but I’ve been enjoying running my own schedule and not having commitments. It’s wonderful. I think I’m making up for those hours I could have been sleeping instead of getting up at 6am to practice the violin when I was younger. One day, I’ll be in the middle of a hustle mindset and spend more waking hours getting where I want to be. But I have no intention of running to the finish line.
This is a journey I intend to take at my pace, no one else’s, and I’m gonna enjoy it the whole way down.