Budgeting can be daunting. Oftentimes the entire concept feels like giving up all things fun, turning your back on anything remotely “luxurious” and not spending a dime. That’s not the case. Budgeting is about spending smartly and preparing. It can be done and you can still live your best life. Here’s how I saved $1000 in one month at 21 years old:
- 50/30/20 Rule: The 50/30/20 rule helps you to build your budget and manage your money. 50% of your check goes to necessities such as rent, groceries and transportation. 30% of your check goes towards flexible spending, or your wants. The final 20% goes to directly into savings to help reach financial goals. The rule is flexible and can be adjusted to your own income. The major thing is to be sure you’re adding even the smallest amount into your savings.
- Write It Down: Keep track of your spending habits. Are you eating out too much? Is online shopping too tempting? Find out your vice and adjust. Cooking meals at home cuts out a lot of expensive. Do you love fashion? Invest in quality pieces instead of multiple trips with low quality purchases. Understand where your money is going and identify why.
- Transfer Your Money ASAP: Here’s a short and sweet tip, transfer that 20% into your savings immediately…then don’t touch it again. It’s easy to forget (or spend) when it’s not already there. Do yourself a favor, take care of it once that direct deposit hits!
- What Do You Really Want?: Keep a list of higher-end purchases that you’d like to purchase and use those as a goal to continue your savings. Do you know you like to brunch on weekends? Write it down as a reminder to cook during the week so you can enjoy your time on the weekend without having to pinch your pennies.
- Monetize Your Skills: Can you do hair or makeup? Do you build websites or code? Yard work? Any skills you possess, any skills that are desired by others, monetize as you see fit. The best way to add to your wallet is a side hustle. Don’t let your hobbies and crafts go unnoticed.
It might not be $1000 in one month, but any amount of savings is beneficial and makes it possible to do more of the things you want to do. Be smart with your spending, prepare for any out of the ordinary situations and save as much as possible. Saving and budgeting does not mean you can’t have fun or enjoy nice things, it just means to mindful of your wallet.