12 Steps to Frugal Budgeting
If I learned nothing from being $5,000 in debt I certainly learned how to budget- frugal budgeting. When I first started college I had a 'budget' and it looked a little like this:
INCOME SPENDING
Allowance 1: $700 Insurance: $135
Allowance 2: $700 Food : $300
Grocery Card: $70 Entertainment: $200
Shopping (Clothes) : $1500
Gas: $200
Total: $1,470.00 Total:2,335.00
If you're terrible with numbers let me put it simply- I was spending more than I was earning. Almost $1,000 more at that. How I managed to avoid being more indebt than I am is beyond me**, however looking back I had no bills. Literally, no rent to pay no electric bills nothing and I could not manage my money. We see where that led me so let's cut right to it and get to My 12 steps to Frugal budgeting.
**It was her grandfather. He spoiled her rotten and caused the monster, Sadly the only way my daughter woke up and saw reality was after he passed away and her hand out was gone - R.I.P Papa
Step 1. How we gone get some money? When I started college I was lucky enough to have my family support me financially 100% and even when I fell down on the things in my budget they always covered it. That's not my current case my allowance is less than half of what it was when I started college and I also work a full time job. Whatever your means for getting your income know the source.
Example: $2,200.00
Step 2. What remains the same? Identify what stays the same. These are bills that are fixed and do not change as we go month to month. These include: Rent, Car insurance, Car Payments, loans, child care expense.
Example: $1,200.00
Step 3. What Changes? Identify what changes. These are the bills that vary based on usage. Although these change they follow a trend and an often times can be estimated. These includes electricity, water, gas
Example: $300.00
** Keep in mind that your living expenses should NEVER be more than half you income. Way to stretch the limit.
Step 4. What do I have left? Yes, I know there are so many more things that you need to include in your budget but these thing will be adjusted and curved to fit the need of what you have left to spend.
Example: Based on the figures above we're left with $700.00
Step 5. How much can I save? You're confused again I see it, but this is another key factor in making a frugal choice in how much you spend on all of the items left on your budget. Make a choice of how much you can save with it being a minimum of 10% of your monthly income.
Example: $230
Step 6: Double it! 'Call the cops she's crazy I don’t know why I came on this blog anyway' WRONG. Double it. The number you quoted yourself saving is what you think will leave you with enough money to stay 'comfortable'. Being frugal is not about spending what keeps you comfortable. Frugality comes from expanding outside of comfort zones to create a system that allows you to save and do more.
Example: $460
Step 7: Leave a little. At this point we're budgeting out, food, and entertainment and miscellaneous supplies. Whatever your balance is that you have to disperse among these categories. Leave a little. And by a little I mean 10%. 10% of whatever it is that you have left. Leave it. Call it a ' Wallet filler' but leave it we never know when that will come in handy (not spent foolishly, but when needed)
Example: $700 (Step 4) - $460 (step 6) = $240 x 10% = $24
Step 8: Plan it out. Here is where you make the most out of what you have left. I may have lost a few of you but, that's what separates the frugal. The common mind would say I have $216 left for food entertainment and miscellaneous supplies this is impossible. Frugal says:
Example: $40 per week on groceries
$12 for my personal supplies
$44 to spend my way
Step 9: Get your head in the game! Transferring from a life of overspending to a life where every bit counts is no walk in the park. You'll say to yourself that this is impossible but it's 100% doable. We just have to say to ourselves" This is what I want to do and I know that I can." Create an affirmation that puts the actions of this budget to work.
Example: “I am a frugal spender I stay within my budget."
Step 10: Meal Planning. The most important way to make your food budget stick is to eat at home. Eating at home not only cuts the cost but allows you to make healthier eating choices for your overall health. Everyone complains about the cost of healthy eating but it's not all that it's thought out to be.
Step 11: Special cloth alert! If you’re with me this far through it I applaud you being frugal is not for the weak. Frugality is a strength that many people do not possess. So, here's to you. For this step we revert back to step 6 whatever it is that you saved here take 10% and reward yourself with whatever it is that you want in my case that's clothes hence the name, and my obsession with DJ Khaled's snaps " Special Cloth alert." You can cash yours in all at once or stack it for an extra special treat. Click here for information on this step.
Example: $46.00
Step 12: Put your money to work. Only half of the battle is won. So, we proved that you don't need to spend all that money on food and clothes, we're saving eating healthy and treating yourself still. How do I get more green? Make your money work for you. There are many opportunities around you and your community that can allow you to turn your savings into a capital and then into a profit. Sitting money makes nothing. Kick it into gear and make your money do a full speed.
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