A New Way to Think About Budgeting: A Financial Journey
I feel like wealth isn’t talked about enough within the black community due to various reasons, such as lack of family time within the household, no mentorship, or no one else in the family educated enough on finances. This leads to children being uneducated on finances when becoming an adult. Leaving them to figure out how to manage money. Figuring out how to manage money when no one has shown you how to, is pretty hard. Most of us end up living paycheck to paycheck or blowing it on wants more than needs. We dig ourselves into these deep debt holes that we can’t get out of and then are judged heavily when we ask for help. Sound familiar? – it does for me!-
I figured out money how probably most people do, by observing. I grew up in a single parent household. My mother didn’t have time to teach me. My grandmother gave me tips here and there, but I learned mostly by observing her. My grandmother spent money like she was always going to have it. There wasn’t one time we went to a store and she didn’t spend under $100. I thought to myself “I’m going to be just like her when I grow up”. And I was, only she knew how to budget and I didn’t.
I have gone through a lot financially and I’m still learning and adjusting. I am by no means a financial guru and do not give out financial advice. I am, however, your favorite lil sis here to give you just a few things I’ve learned on my road to financial wealth.
I’ve learned that small changes win the race. The first thing I did when I decided to get serious about my finances was, – you guessed it– research! Youtube, Pinterest and books were my saving grace. What got me started was Dave Ramsey Baby Steps. Of course I had to tweak it because I’m not saving for kids or college, but it was definitely a start. Then on Youtube I followed TFD ( The Financial Diet) , Camille Collazo, and The Break. TFD has 2 books (available on audible as well) that dive deep into money. They are good short reads and worth it. I do have a few books that I want to read, such as Rich Dad, Poor Dad ,which always comes highly recommended, but I’m a visual person when it comes to numbers and investing, so I started there with watching people talk about money. While researching, I also found a few tricks of my own.
- Pay Yourself First AND last
I know you’re going, duh! This isn’t new, it’s what everyone always says! Well, that’s because it’s true! You did all the hard work, so when the check comes pay yourself first! In the beginning this was a little hard for me. I would pay myself and then I would take it back and spend it. If I could see the money in my account then I was sure to spend it. I had to figure out a way to save money without being able to see it in my account. I set up a separate savings account at a local credit union that had a 2.5% return without a card to the account. I have a percentage of my check direct deposited into that account as soon as I get paid. This way I cannot remove the money from the account without physically going to the bank. I never have to see it and I check the account by the monthly statements.
Another way I paid myself first was a savings challenge. I would always see the money challenges going around on Pinterest and other social media apps, and I thought “What could it hurt?” I grabbed a mason jar cut numbers 1-52 and I pulled 2 numbers at random every 2 weeks ( I get paid biweekly, however, this challenge was weekly so I had to tailor it for myself). Whatever the numbers equaled went straight into my emergency savings at my bank. I think its important to have a bank and a credit union. Banks are everywhere and credit unions are usually local. You get more perks with a credit union than a typical bank account. I enjoyed this challenge because it really did feel like a game. I never knew what the amount would be and it was thrilling to see how fast the numbers added up. It even challenged me to see if I could save even faster. I actually became obsessed with how much I could save.
One thing I started doing that most people don’t do is paying myself last as well. The day before payday, what is ever left in my checking goes to my emergency savings. This has helped a lot with savings and budgeting. Flexible bills tend to fluctuate so I over budget just to make sure I have it all covered. I also budget myself an extra spending fund just in case I forgot something, I call it a cushion. Normally, those funds are left over and I slide that money into my emergency savings.
I love to shop. – we should know this by now– so paying myself first meant budgeting being able to shop. Saving money is nice, but as Carrie Bradshaw once said “ I like my money right where I can see it… hanging in my closet.” Yes saving is necessary, but so is enjoying it. One reason I could never save the money is because I would always take it out to eat or shop, it made me feel better. A little treat –or a lot of treats– always made me feel like the hard work was worth it. I carved out a spot in my budget to both save and be able to buy myself something –or a lot of somethings– nice.
- Everything Counts!
Speaking of budgeting, having a budget is important not only for paying your bills, but also as a guide to get past living paycheck to paycheck. One major reason I failed at meeting any financial goals was because I left too much out of my budget. I wrote down my monthly bills in my budget, but things that were flexible such as; gas, food, going out, subscriptions, grooming, personal items etc. all got left out. I would pay my bills and whatever was left was up to chance.
This was a big no no. It left me overspending and sometimes left without things I needed. I was living paycheck to paycheck and sometimes couldn’t even make it to pay day.
I fixed my monthly budget to include every single thing possible that I needed money for. This took some getting used to because I hated having to guess at what my flexible spending would be. After a few months I began to pinpoint a number that pretty accurate for each of my flexibles items in my budget such as $80 for gas, 50 for personal items etc. this helped me stay on track within my budget You can always work backwards to find this. After all your bill are paid lets say you have $300 left, break that $300 down to each item and stay within the allotted amount.
I have found some neat tools to help me budget. One of the best tools is the paycheck calculator. Whether you’re hourly or salary, make overtime or bonuses, it will calculate how much your checks will be with post and pretax deductions calculated. It will also give you suggestions for credit cards and savings!
NerdWallet is the next best thing to keeping you on track with how much you should have for each part of your budget if you follow the 50/30/20 rule. I have found this rule to be the best for me, especially with saving, i was cutting myself wayyy short when it came to saving. they also have articles on the site that offer advice for finances as well.
- Use all of your Job’s Benefits
So much money is left on the table because people do not use all of their job benefits! I’m not talking about matching the 401k so you get the maximum benefits- but that is important by all means get all the money they are willing to offer– but the other benefits that get left on the table.
Say for instance stocks. You work for the company, why not buy a stock in it? One of my coworkers earned an extra 10k just from her stock alone! She was able to put down that money on her first house.
My main full time job is a huge fortune 500 company in the healthcare field. Almost anything health related I get a discount for. Sinus meds, asthma equipment, gym memberships etc. I get a discount for. My job also offers a plethora of discounts with other companies for auto insurance, phone bill, to hotel discounts, to pay for parking at the airport. My job also gives us free money for being healthy if we have an HSA account with our medical insurance. That’s right, free money for being a non-smoker, or meeting certain health criteria’s, or for donating blood. We even get an extra $600 for getting pregnant.
Your job can have so much to offer. I suggest looking into the company you work for and see where you can save or earn.
I’m still learning and researching as I want to get into investing soon. I still have my setbacks, but I learn from them and continue to build. I hope some of these tips were helpful. How did you learn about finances and what are some of the ways you save? Let’s talk about it!
Dont be bitter,