Let's Talk Budgeting

Hi friends!

With my constant traveling, shooting, working and very busy months I struggled to organize my expenses properly. The first time I took action to write down ALL of my spending I was actually really shocked...but it was also really neat to see my income and find some balance.

Initially I was unsure about writing this blog post, I was kind of embarrassed, what 28 year old doesn’t have a budgeting plan?! To be honest it just didn’t feel necessary. I never spend beyond my means, I was paying bills comfortably, it was all good. But when someone asked me what my monthly spending was, aside from bills, I had no idea and that kind of scared me. So I decided to create a chart that I update daily with income and spending. I’ve been keeping track for 6 months now of EVERYTHING, down to the iced matcha from INSERT RESTAURANT NAME. Don’t get me wrong, this is a lot of work but totally worth it and this practice has helped me learn a thing or two about money.

With this chart I’m able to see what I make vs. what I spend. With these numbers I’ve been able to create a budgeting plan for the start of each month.

How do I do it??

First of all I live by myself (not with my parents) so the rent, internet, phone bill, car etc. are all on me! These bills should be your first priority. No pair of expensive jeans is worth having your lights shut off! So when you’re first looking at how much you spend in a month start here.

Next is groceries (separate from eating out). Making food at home is a huge money saver. I try and eat out less than 3 times a week and rarely for breakfast. In order to cut down how often I eat out I try and invite friends over to cook with me...or I cook for them *ahem* Qian. It still gives me the social feeling of hanging out with a friend and the joy of sharing a meal - for a fraction of the price! Plus, I love grocery shopping and cooking so that makes it easy!

After my bills and groceries are paid for the rest of my spending is pretty much on the little stuff like eating out, gas for my car, new clothes etc.

For me I have calculated a % of my income that I spend on these ‘extras’

(average monthly income - average cost of bills) x .2 = X

X → Into savings account

X → Pleasure spending

This means that 20% of my income after bills/groceries goes into an inaccessible savings account and 20% can be spent on pleasure. The remaining goes into my bank account for things like traveling, flight, hotels etc. more work like expenses.

Here is an example calculation
(with completely random numbers)

Average income - $5000
Phone bill - $100
Groceries per month - $300
Rent - $1500
Car payment - $400
Internet - $100

($5000 - $2400) x .2 = $520
So $520 goes into savings and I have $520 to spend on everything from shampoo to eating out, gas for my car to new clothes. Keep in mind this isn’t $500 to blow at the mall.

There are definitely more complicated/detailed/organized ways to create your budget plan but this is what is working for my right now! It feels simple and sensible and easy enough to handle.

I’m super old school with pen and paper and love writing things down but if that isn’t for you there are some good budgeting apps I’ve heard of as well!