BY MARYANN AKINBOYEWA
Every AlphaBabe should know how to manage her money. Yes, we have to get these coins in formation. Because who has time for bounced checks and overdrawn bank accounts?
I surely don’t.
Money management can be confusing and let’s be real, B-O-R-I-N-G! The good news is it doesn’t have to be! I’ve warmed up significantly when it comes to managing my money and yes, I happily create a budget in an Excel spreadsheet each month.
Here are a few tips for creating your first budget:
1. Write out all expenses and automatic withdrawals
Write out every single expense including fixed expenses (rent, utilities, internet, groceries, student loans) and other variable expenses such as bars, entertainment, clothing, self-care, etc.
Don’t forget to include automatic withdrawals! Nothing messes up a budget like forgetting about that $9.99/month for Netflix or Spotify. The small amounts make a difference and forgetting something that is withdrawn automatically will throw off your budget.
Write out every single expense you have including fixed and variable expenses
2. Write out all income sources.
Alright, here’s the fun part—show me the money, honey!
Write out all your sources of income. You want to include both fixed and irregular income.
Your fixed income refers to set payments you receive on a consistent schedule. For example, I receive my semi-monthly salary from my full-time employer on the 15th and 30th of each month.
Unlike fixed income, irregular income can be sporadic. It may include a culmination of one-time payments such as birthday money, holiday gifts, freelance work, etc.
Either way, the goal is to work ahead each month and to outline all the income you will take in.
Write out all of your income sources, both fixed and irregular.
3. Pay yourself first.
I want you to learn how to save like it’s nobody’s business! Being the AlphaBabe that you are, you will have lots of success—but there will be moments when the $%!^ hits the fan and you’re going to wish you had some savings to help tide the rainy days.
As I like to say: Don’t wish for it, work for it.
Each time you get paid, put aside some money in your savings account. How much you save is up to you, but most financial experts recommend that 15-20% of your paycheck should go toward savings.
If you’re really feeling money savvy, go ahead and set up a savings account and automate your payments so that as soon as you get paid, money goes right into your savings account. This way, you don’t have to consciously think about saving each month. It’s already done for you!
Decide how much you’ll save each month.
3 Quick Budgeting Tips for the budding Alpha Babe:
- Avoid impulse buys.
- Keep a “buffer” amount in your checking account. I try to spend all of my check on something: whether it’s putting it away, using it to pay down some debt, or treating myself. But, even though I spend all of my checks, I am never without money. So keep $200-$300 in the checking account at all times just in case.
- Do not dip into your savings unless it’s an emergency or something you’ve consciously planned for (i.e. wedding, travel, car).
Your turn! What other tips do you have for first-time budget creators?
Maryann Akinboyewa is an AlphaBabe in the making. She’s passionate about helping women succeed in work, life and business. Say hello @himaryann.