Are You Fiscally Responsible? How to Stay Woke Not Broke.

(Pic–> Tweet ” Buying a $40 bottle of liquor in the club for $300 doesn’t seem like some baller shit to me, just fiscally irresponsible lmao” re: “Did you mean to spell physically wrong orrr……” re: This is why I don’t argue with y’all)

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I’m not here to argue, but, Y’all- Fiscal health is important. Even though sis is right got to be physically responsible as well.

I roll my eyes everytime I hear someone say stop buying your morning coffee or bagel. Will that save you money, YES, but if it’s what you want to do, budget it! I love to cook but I also love to eat out so I budget that I will spend about $300 in a month for food. With that knowledge, I can also plan my savings, bills etc. without being surprised at the end of the month because my bank account is close to ZERO, or I’m declined at Brunch.

My method is pretty low-key. I pay myself first (Pension, 403 (b), my savings account) then I pay my bills. All the money that is left over that month I spend or save. I usually have a good amount of money left in my checking by the time my next paycheck comes in so I send that over to an investment or savings account/goal, or go to that fancy restaurant I’ve been re-reading the menu for. I believe because I pay myself first I am already primed to save money. So when I’m out and about I usually ask myself if I really want something. At some point, if I’m craving a chocolate chip cookie, I’ll get it, but I’m cognizant of how much it costs. I never want to be super close to my base amount in my checking.

1. Know how much you get paid pre-tax and post-tax
2. Know how much your bills are
3. Pay yourself- The minute I get paid I transfer money to a different account
   • I invest in myself. Paying myself first basically sets the priority of what I do with my money each paycheck, thus the long term.
   • Sometimes my savings account, sometimes a different bank – it depends on my savings goals. If your job allows you to put 90% in checking 10% in savings go for it. The more seamless it is the more likely you are to do it. But always check that you got your money lol!  
4. Pay bills (setting up automatic payment is helpful but remember the dates money will be withdrawn- Avoid late fees and Bank fees 👿)
5. Spend what is left

So why these steps?

I am always disgusted by the amount of money that is supposedly mine but never reaches my bank account due to taxes. I think it’s important to know how much money comes out so you can either fix the number of exemptions you have and/ or have a good idea of what tax season will bring (or take away).

• There are also programs that allow you to use some pre-tax money such as WageWorks – which takes out money for your MetroCard pre-tax ( that’s pretty cool and saves soo much money)

These first two steps are more to ground me a bit so the number I decide to save is in line with what I can afford.

Step three is THE MOST IMPORTANT. By this point, the money is in my bank account and it’s time to PAY MYSELF, cuz, I’m worth it. Once my savings account is fed then I think about everyone else.  

Time to pay bills, because well…we have to if we want housing, cell phone, car etc.

Spend what’s left

** David Ramsey, super famous personal finance guy, says pay yourself first and if you don’t have enough money to pay bills etc then get a second job. I agree with this to an extent because what if you already have multiple streams of income or can’t get a second job. If you know you can save $10 consistently commit to that and build up.

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When I first started budgeting I used % systems, because I wasn’t sure how much I should be spending so wanted to follow some norms. I recently veered from that and plug in numbers based on my previous history of spending, and use my obsession with Google Calendar to pay my bills on time and track my $$. Things like Mint or a feature in your banking app can help you track your spending.

Monthly % system  ( this gave me a range of what I should be spending money on and I adjusted till it made sense for me.)

These are some breakdowns people use to guide them. Remember a budget is a guide and personal, there are a ton of budget templates out there use what best works for you. The 5 steps above are what I try to live by.

Start your personal finance journey by:

1. Opening your Banking App if there is a tracking tool look at the average you spend in each category.  If you don’t have this option print 3 months of statements.
2. Write down your averages and notice what you are spending money on
3. From there look at what are concrete bills (ex Rent, Car Insurance etc = 1500) , and how much you make a month (3000)
4. Subtract Income from concrete debt (3000-1500) you now have 1500= look at your reports again how much do grocery and other essentials cost on average
5. Here you have some wiggle room see what groceries you are buying and if you can save any money, average out the essentials that are not necessarily concrete ( 500) so 1500-500= 1000 ( you have 1000 to spend now going to Step 3 how much do you want to save maybe $500. So now you have $500 to spend on whatever you want Worry free.

I know everyone’s financial situation is different. These numbers are simply examples. Need support with your budget/cash-flow? Send over your Income, Expenses, and Savings goals and we can send you feedback. contact@colorfullexperience.com

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Resources  :

https://grow.acorns.com/how-to-create-a-budget-that-works/

http://www.iheartbudgets.net/2012/05/budgeting-basics-part-1-laying-your-financial-foundation/