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Rising Star
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Enthusiast
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Enthusiast
^ this
I just maxed out 401k and saved 20k a year. Spent the rest
Rising Star
I do this but 401k and HSA
Rising Star
I focus on top line
Enthusiast
Out of curiosity, what’s new at 26 that caused you to start needing a budget?
Rising Star
That’s great- what country? It could be far less expensive than here. And why quit consulting? You can do that anywhere.
Chief
I’m 39 and still don’t have a budget. I do what I want.
Start with the credit spend analysis on your credit cards to see what you’re currently spending, then you can pick out any app from a million to help you budget. Basically you outline your mandatory expenses (food/rent/car) and then go through your optional expenses and track your spending to the budget through the month
Rising Star
Everydollar free version from Ramsey
Stupid easy to use and a good place to learn how to balance a budget
What’s a budget?
I started saving more money when I started using Mint. Seeing my savings/net worth go up every month encourage me to save more and cut unnecessary spending.
Step 1: know your personal net worth. Fancy way of saying know what's in your savings and investment accounts. Know all of your debt (credit cards, student loans, car loans, medical bills etc).
Step 2: track your spending using mint. You need to know how much you spend and on what. This will help set up your basis for your budget.
Step 3a: set up x% of savings a month to get to 3-6 months worth of your monthly expenses.
Step 3b: Pay off high interest debt.
Two big components focus on paying down high interest debt & build up an emergency savings.
Hey totally get it! I didn’t have a budget until about the same age, mainly because I always had a job and would be able to pay for everything (like minimum payments and stuff). I read this book called Worry Free Money by Shannon Lee Simons and it changed my life. It’s practical budget and savings advice for any type of person. I payed off 20k debt in 3 years with using the method laid out in the book.
Enthusiast
If you really want to understand the concept, forget all the fancy apps and credit card tracking mechanisms. Just open up an Excel sheet. Use 2 columns. "What" and "how much". Then list all your expenses in a month starting with your mandatory (rent, bills etc) + non mandatory (restaurants, outings, clothes etc). Total it out at the bottom. Do this for at least 3 or 4 months. This will give you an idea of what you spend per month.
You already know how much you are making. Substract your spending from it. This will give you an idea of what you save per month.
The rest is you figuring out if what you're spending vs what you're making in a month is where you want to be. If not, based on this insight into your finances you create a monthly budget, which is basically you specifying what amount you want to spend on which and sticking to it.
Pro
Never had one either…
I focus on top line expenses and credit card bills, but if you want to have a pre made Google sheet budget, check out monthly budgets on Etsy. You can find them for $5 and they’re easy to fill in and understand where your money is going
Me either (27 F here). I feel if I’m maxing out every retirement savings vehicle every year plus adding a portion of my paycheck into my Fidelity account plus have an emergency liquidity account I’m not sure I need to do anything else.
Rising Star
Automate everything. Saving, bill pay, net worth/cash flow tracking
Rising Star
I use Personal Capital
All of these comments are so helpful thank you guys 🥺. For more context I’m not actually an analyst anymore and I make $100K. I have no debt and my rent is about $1600 a month. I would like to buy a home eventually but I have no idea what % of my income I should be putting away.
How much a month are you saving now? There's no real right answer which is a little frustrating. People will tell you to save as much as you can. If your monthly take home pay is around $5,500(?), try to save at least $1,100-1650 (20-30%). But if you work for a company that offers a 401(k) match I would also contribute up to the match even if you are saving for a home.
Enthusiast
First budget:
- Pay yourself by doing automatic savings/investments/401K. How much? Whatever you think is good (but try to get 10-20% of your salary, 401K incl.). Have at least 4 accounts: 401K, long-term savings (think down payment), emergency savings (build up to 6-9 months salary), and “short term” savings (think: that next vacation).
- Everything else is “discretionary”. Just stay within your means and don’t touch those savings.
Enthusiast
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