Somehow, there’s never enough money left at the end of the month. Something always comes up and you can’t seem to figure out why.
You have goals. You have dreams. Someday, you want to take one of those Eat, Pray, Love trips around Europe and Asia. You fantasize about the day when you can say, “Screw you!” to your boss, hop on a plane to God-knows-where, and go off the grid for a month. Hell, forget the travel. You’d be ecstatic to dump your student loan debt.
But with your paycheck? You can’t even seem to make it to the 1st. You can barely keep your checking account balance above zero, let alone putting thousands of dollars toward something meaningful and awesome like a round-the-world ticket or a debt-free life.
Here’s the good news: It’s not you, it’s your budget. And there’s an easy way to fix it so you can live the life of your dreams.
What’s wrong with your budget:
1. You don’t actually have a budget
This seems obvious, but where most people go wrong is not having a budget in the first place. I spent a few months “trusting” myself that I’d spend smartly and reach my savings goals without keeping track of where my money went… and I failed miserably. If you don’t have a budget (even a lose one), it’s 100x more difficult to stay on target for the future and reign in frivolous purchases today.
Solution: sign up for a website like Mint.com to help you keep track of big-picture spending categories like food and travel.
2. Your budget isn’t flexible
I’m guilty of maintaining a rigid budget – budgeting odd amounts and then blowing that limit out of the water. One month I’d allocated $35 for “gifts, unexpected, etc.” and ended up spending $100+ on two birthday parties and a trip to urgent care. I felt completely guilty that I didn’t “stay within my budget” for the month. And guilt is a ridiculous, wasted emotion – it doesn’t bring your money back and it only leaves you feeling crappy at the end of the month. A flexible budget means that you’re realistic with your habits, you anticipate moments of weakness and you allow yourself some moments to go a few (or a few hundred) dollars over without killing yourself.
Solution: Ditch the guilt and think in 3 “big picture” buckets instead – the must-haves, the things I want and my savings and goals. Another strategy for handling the unexpected: create an “Oh Sh*t” slush fund for those moments when you accidentally overdraft on your account or get a $200 speeding ticket.
3. You haven’t decided on your financial priorities
Are you living a YOLO-type lifestyle but desperately want to climb your way out of debt? Do you long to travel every weekend but find yourself spending $50 a night in bars instead? What you do with your money is your choice. But if some of your cash isn’t going toward your longer-term priorities, then you might feel like you’re running in circles. Everyone has disposable income. What matters is what you do with it.
Solution: Re-prioritize. If your goals and dreams are that important to you, focus on funneling your money on what really matters and forgoing a few day-to-day expenses to make that happen. The memories you’ll get from a trip to South America will last you a lifetime. The memories you make at the bar this weekend… not so much.
4. You don’t pay attention to both sides of the budget equation
Remember that budgeting is a two-way street. The more money you earn, the less you’ll have to worry about meeting your basic necessities. You know what you don’t have to worry about when you make $75,000 a year? Your $3 lattes every morning. Just sayin’.
Soluation: While you practice some conscious spending strategies, be sure to invest some time and resources in negotiating for a raise, looking for a better job or even working on the side.
If your budget sucks at the moment, you’re not alone: mine is pretty crappy now too. While paying off my debt is still a big priority, I’m certainly spending more and more money on things that don’t matter. So if you’re feeling like you’re in a slump with your money (like me), take a moment to look over this list and un-suck your budget 🙂
Original Photo: South Park Underpants Gnomes
Interested in refinancing your student loans?Here are the top 6 lenders of 2016!
|Lender||Rates (APR)||Eligible Degrees|
|3.64% - 7.20%||Undergrad & Graduate||Visit DRB|
|2.115% - 6.74%||Undergrad & Graduate||Visit Sofi|
|2.14% - 7.45%||Undergrad & Graduate||Visit Earnest|
|2.22% - 7.74%||Undergrad & Graduate||Visit Commonbond|
|2.14% - 7.99%1||Undergrad & Graduate||Visit Citizens|