“Spend your money wisely.”. I undoubtably heard this phrase upwards of a thousand times. Since my first job at 15 to every job I’ve held since, this phrase became a constant thought in my mind. But I’ll be the first to admit I haven’t always lived by it and that’s part of the reason I’m here today. Writing about my experiences and bringing you along on my journey and hopefully one of your own. I’ve wasted money on everything from designer shoes and wallets to Harley Davidson Motorcycles. Looking back now, each and every time I bought something I didn’t need, I learned a lesson.
Now, I’m fresh out of college and I have a goal of where in life I want to go and where I want to be. I’ll share that goal with you sometime in the future but in essence it comes down to freedom. And that’s why I have a budget. A budget sounds like the exact opposite of freedom, you have to stick to it, live by it, and adjust it constantly. Not exactly what any of us want to be doing in our free time.
First things first, don’t make it a shoestring budget. Don’t think you can survive on $30 a week on groceries. Make it realistic. I over budget for my necessary expenses such as food so when I don’t meet that I put the rest away into a Roth IRA. Don’t think you need to cut your friends out of your life because you won’t be able to go out with them. Make room for your social life, it’s important for your health and you’ll be happier for doing it.
My main categories that I budget for on a monthly basis are:
- Student Loans
- Apollo (my dog)
- Social life
These major categories allow me to budget for what I consider important while also allocating a certain amount a month towards my savings account and my retirement accounts.
In a perfect world, I’d meet all of my budget requirements with my first paycheck of the month and commit the entirety of the second towards savings, real estate, investing, and retirement. But I’m not there yet, I will be someday and you all will follow me as I work towards that. For now I make do with sticking to my budget and growing my savings and my Roth IRA.
For the first couple of months it was really tough, the biggest thing I noticed was that I was going out to eat with coworkers for lunch or drinks after work and that was killing my budget. It’s hard to say no to a drink after a long day and I’m not saying you should but just be aware of where your money is going. If you want to make another category on your budget for work related social life separate from your social life, feel free. Just don’t add too many categories that you’re left with nothing.
“Do not save what is left after spending, but spend what is left after saving.” -Warren Buffet
I can’t stress this enough. I’m an economics student and I understand about the life cycle of a consumer but it’s so important to start saving early and often. Don’t listen to the guys in your fraternity or sorority say that you should get as many credit cards as you qualify for and max them all out so you can enjoy college to the max.
I had an amazing college experience and came out with minimal debt (excluding student loans, which I’ll cover my experiences with at another time). But that small credit card debt didn’t become minimal until I neared graduation. That’s because like all 21 year olds fresh from their internships in NYC I was flushed with money and had a huge ego. Playing credit card roulette with my friends at the bar didn’t seem like a big deal. (For those of you that don’t know what this is, it’s when you and everyone you’re with puts their credit cards in a pile at the end of a night out and lets the waitress decide which card to put the entire tab on). I highly advise you not to do this. We rationalized it all works out in the end, let me assure you, it does not. So I didn’t budget well through college and it cost me heading in to the real world. Now I’m cognizant about what I spend my money on (and how tabs are separated) and where it goes. I know around how much I can spend on a night out and still be happy about it the next day. I know how often I should say yes to my coworkers and go grab that drink and still have money left over to put away in savings.
Seriously, don’t be afraid to budget. You can be as tough and strict on your budget as you want to be but my just putting the numbers down somewhere you will start making progress towards your goal. Small steps now mean huge returns in the future.
I’d like to put an excel sheet in here that you all can download and use to create your own budgets but we’re still fine tuning the website to be optimized for that sort of thing. For now, if you’re interested in putting together a better budget, or start one altogether, reach out in the contact me section. It’ll go straight to my email and we can set up a time to talk and I’ll be able to send you the tools needed from there.