Budgeting Basics

(Christian here. Today’s post is a guest post from the blog Red Pill Going Galt. Inspired from this post I did, he contributed a good post on keeping a budget. Enjoy.)

If you want to live a playboy life you need to have your finances in strict order. You don’t want to be rolling in what McQueen refers to as “Hood Rich” (in PHX/Scottsdale we refer to them as 30k millionaires)

McQueen did a good job explaining the mindset one must have to get their financial live going in the right direction. I wanted to expand on that and outline how I budget my money. While this isn’t necessarily the answer for everyone, it works for me and I offer this in hopes you can pick up an idea or two to help get your money in order.

Back in the day I wasn’t has financially savvy as I am now. I would get a paycheck and just blow it on whatever with no regard to what bills were coming up, etc. I would find myself struggling to make it to my next check, paying late fees, etc. I’m not sure what the catalyst was for my change, but that lifestyle eventually burned me out and I made a 180 change.

Here is how I run things now: Rather than my money running me, I run my money.

2010-04-19-Budgeting-for-Love

My job is my primary source of income and pays biweekly, so that means 26 paychecks per year. What I’ve done is calculated all my known bills such as rent, cell, gym, etc. and taken the monthly amount and multiplied by 12 – that gives me what I spend annually on that item. Side note, this also can help you recognize where you may be wasting a lot of money. Paying monthly can sometimes blind you to how much you are spending per annum. Just this step may help you plug some slow drains on your cash.

Now that I know how much each bill is per year I can divide that by 26 which gives me how much I need to budget out from each check to cover my bills. Believe me this makes life so much easier. In my old ways I would get a check and think, “Hey, I get another check before rent is due, I can buy….”. Well, that next check comes and a big chunk of it now has to go to cover rent and I was left with little to tide me over the next two weeks.

Not fun and not very conducive to a playboy lifestyle.

Now, when check comes I know how much I have to budget out for rent. The next two weeks are comfortable and I’m not stressing.

I made an excel spreadsheet and created a worksheet for each year. This also helps track if I am increasing my income (which I should be) or if I am stagnating and need to step up my career game.

budget

Another spreadsheet I created that helps me see how much percentage wise I am spending on bills to help identify areas that I can cut back on or make adjustments to.

bills budget

Now that I got my bills taken care of, another tool I use is Mint.com.

Mint allows you to add your bank, investment & other accounts to give you a snapshot of your balance sheet in one place. Mint also allows you to enter your scheduled bills and will post/email you reminders as the bill dates approach. This can be incredibly handy for those bills that may only come due quarterly or annually making them easy to slip your mind. Mint also allows you to flag transactions as tax related so come tax time you don’t miss out on claiming any deductions from your side hustle expenses. You do have a side hustle, right?

Don’t be concerned with putting your login info in Mint. The site does not allow you to initiate any transactions; it simply collects the data from the financial institutions and presents them to you.

Lastly, another tool I like to use is CapitalOne 360 (formerly ING direct) savings account.

Say what you will about CapOne, they haven’t changed anything since taking it over from ING. The CapitalOne 360 savings account doesn’t have any fees or minimum balance requirements. What is great about this account is the ability to create sub accounts. This allows me to budget out for bigger ticket items. I can name my account after what it is – ex “Vegas Hangover Experience” if I want to do McQueen’s LVHE. Another example is a sub account I set up for my annual car registration.

Nothing can sink your mood faster than getting that notice from the state that your registration is due in a few weeks and you have to scamble to budget that out. Now all I have to do is login and setup a transfer from the sub account to my checking to cover that bill. You can set up recurring deposits/transfers for your other bank accounts, automating the process.

If you want to have a true playboy lifestyle you need to have your money in order. While setting up the spreadsheets may take some time initially after that managing your money is really automated and does not require a lot from you. Also, seeing the figures in black & white in front of you really does help to see where you stand and see where you can make improvements.

Save $$$ + Get Laid here.

Read More: Ballin’ On A Budget College Edition 

3 Replies to “Budgeting Basics”

  1. Gpod stuff. I use mint as well and it’s got some good budgeting tools and let’s me see where the money is going. Also using the subaccounts for vacation, car savings, the big bills that come every 6 months, etc. Your mood changes night to day when you get out of debt and are eventually paying with cash that you saved up.

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