I think that budgeting is a cornerstone skill to living as independently as possible. It’s one of the first skills I put into practice before I moved away from home. Budgeting consists of two parts, the first part is getting the “big picture” of what your fixed expenses and priorities are. The second part encompasses the skills or routine that you use on a regular basis in deciding whether to spend money or not.
After reviewing and paying all of my fixed expenses, I see how much money I have left over. I think about weekly flexible costs and if I have enough extra money to save for unknown bills that sometimes pop up. For example, I pay rent, my cell phone bill, and transportation costs. If I have $200 for the rest of the month, I would put fifty dollars in savings, based on this scenario.
Looking at the big picture, I’ve decided that I would like to purchase a flat screen television. First I do the research regarding the type of television, including brand, reviews, size and features included. This helps determine the approximate price of the item I want to buy. For what suits my needs, the price range is around $200. Now I look at that amount I have “left over” when I subtract my fixed expenses from my monthly income. From there I can figure out how much I can safely save toward this “big ticket item” without stretching myself or being “broke” for the rest of the month. In this case, I figured that I could save $50 each month and purchase the television I desire in four months. Making a plan to save the money every month gives me a feeling of control over my life.
Looking at the “small picture” now, I like to use small treats or low cost outings as a way of making sure I don’t feel deprived. However, I am always careful because my low cost treats can add up to a hefty amount if I’m not careful. A treat every once in a while is great and special but if I do it too often, it’s just routine and not a special treat. Going to the $2.50 movie at the local theater and packing a snack or meal to eat ahead of time is an example of one of my favorite low cost outings and it’s a way to treat myself.
I use budgeting a lot, not only to save money but as a way of making sure I have choices. I have a choice; I can control my money or my money can control me. If I don’t think about what I want, it’s too easy for me to spend my money without really thinking.
I realize this topic may seem a bit boring, but I think this subject is important for everyone. Budgeting is good for your mental health. It doesn’t matter what budgeting system you use, as long as you stay consistent and it is easy for you to use. I have saved myself a lot of anxiety and headaches by being thoughtful in my spending habits. There’s so much I can’t control in my life that it feels good for me to decide how to use my money.