Create Your Own Budget Pie Chart
I know I’ve been saying that budgets don’t work, but you still have to decide how you’ll be spending your money. You have to agree on how much money you’re willing and able to spend on living necessities such as housing and food. This helps you track how you’re spending your money. There’s a ton of apps and I personally use mint. You need to decide what percentage of your income you want to spend on living / fun / savings.
Make it Automatic
Once you’ve come up with your pie chart, make it automatic. Set all your bills on autopay. Most importantly, set your savings to automatic! I find that small biweekly transfers to my savings account the day after payday and larger monthly transfers to my online (higher interest yielding) savings account, works best for me.
Set Aside an Emergency Fund
Pick a number that keeps your first world anxiety at bay. If having three or six months of living expenses saved helps you sleep at night, then that’s how much money you need to have set aside.
Stop Ignoring Your Debt
No, seriously it ain’t going nowhere! The longer you ignore it, the larger it grows and the more you owe. There’s various ways to pay back debt. Two methods I’ve used is the ladder system and consolidation. The ladder system focuses on paying off the debt with the largest interest first. That way over time you will owe less in interest payments. Debt consolidation allows you to apply for a loan at a lower interest rate. You’d use that loan to pay off the debt (say credit cards), and then pay back the loan over the agreed upon time.
Switch to Cash
Once you’ve paid off that debt or while you’re in the process of paying off the debt, STOP using credit cards! No seriously! Remove them from Apple Wallet, PayPal, Cash App, Venmo or any other app you have them saved in. Unsubscribe from emails that might trigger you to spend money. Set the credit cards to “pay off account balance” automatically at the end of each month. That way, you’re using credit cards like cash. If this is too risky for you, leave the credit cards at home all together! The key is to find a method that works best for you. Most importantly, don’t buy something unless you have the cash.