The B-Word: Budgeting (and Why It’s Your Secret Weapon)
Budgeting gets a bad rap. It sounds restrictive—like a diet for your wallet. But here’s the truth: a budget isn’t about limiting yourself. It’s about taking control. It’s the difference between being the boss of your money or an employee to your whims. A budget helps you save, invest, spend, and even give—on purpose and with confidence.
You’ve probably heard that people who write down their goals are more likely to achieve them. Well, a budget is simply a written plan for your money. Even if you don’t stick to it perfectly, the act of creating one shifts you from reactive to intentional.
Let’s break it down into simple, doable steps:
- Pay Yourself First (Yes, Before Anything Else)
Before you pay rent, before groceries, before that tempting online sale—set aside money for your future self. A good rule of thumb? Save at least 10% of your income. If you can do more, great! In my house, we aim for 30-40% depending on the year.
Why? Because saving first forces you to prioritize what’s truly necessary. It makes you think about the difference between needs (nutritious meals), basics (three balanced meals a day), and wants ($20 poke bowls).
- Tackle Debt Like It’s an Emergency (Because It Is)
Got credit card debt? Student loans? Car payments? These should be your next priority. Credit card debt, in particular, is a financial fire alarm—high interest rates make it a money sink. If you have credit card balances, make a plan to pay them off ASAP. The snowball method (paying off the smallest debt first for quick wins) or the avalanche method (tackling the highest interest rate first) can help.
And while we’re at it—when possible, buy cars in cash. If you cannot pay cash et, you cannot afford it. I made the mistake of financing a car when I was younger, but I paid it off early. Lesson learned.
- Budget What’s Left (Needs, Basics, and Fun Money)
Once savings and debt payments are set, allocate the rest:
- Absolute Needs: Rent/mortgage, utilities, groceries, insurance
- Basics: Internet, transportation, work attire
- Wants: Dining out, entertainment, subscriptions, travel
A rough breakdown for a young adult earning $800/week (this is in line with median wage income from the Bureau of Labor statistics for a 24 year old) might look like this:
- Savings & Investing: 10-30%
- Debt Payments: 10-20%
- Living Expenses (Rent, Food, Utilities): 40-50%
- Luxuries & Fun Money: 10-20%
- Unexpected/Overages: 5%
- Track Your Actual Spending for a Month
Budgets are plans. But what you actually spend? That’s reality. For one month, write down every expense. Use a notebook, an app (I like Spending Tracker—one-time $2.99 fee, no bank connection required), or even a simple notes app.
The goal? See where your money really goes and adjust your budget accordingly. Patterns emerge. Maybe your “miscellaneous” category is a silent budget killer, or maybe you’re spending less than you thought on essentials. Either way, knowledge = power.
- Give Yourself Flexibility (A Budget Isn’t a Straightjacket)
Some people use the envelope method—once an envelope is empty, spending stops. I take a slightly looser approach: if I overspend in one category, I balance it out next month. That way, unexpected deals (like discounted Six Flags passes!) or last-minute gifts don’t derail my entire financial plan. You can see the buffer and unexpected expenses category in the budget above.
The Bottom Line
- Budgeting isn’t about deprivation—it’s about directing your money toward what actually matters to you. It’s about choice. And when you’re in control, financial peace isn’t just possible—it’s inevitable.
- Let me know in the comments if you would like to see an example with categories!