Sam: It’s easy to say, ‘Step One is to set a budget.’ But it’s like, ‘Well, how do I set a budget? What do I do?’
First, write down what your necessary expenses are – utilities, mortgage or rent. These are the things you can’t live without. Then, on top of that, add the expenses that allow you to go about your day and go to work, like gas and food.
From there, budget for the extra things. You want to hit an amount that’s comfortable for you, where you’re not too restrained, but you’re also not overspending. You can stash some of it away and not use it.
Do you prefer the cash envelope method of budgeting? Chime members have access to over 60,000 fee-free ATMs.²
Also, the budget you set in January may not be the same in July or in December. So I’d say give any budget three months. If it doesn’t work out, create a new budget, or move some numbers around.
The biggest change for us has been traveling full-time as a family. Before we were stationary, we had a set rent, and a gas budget. Now, we don’t have rent, but we have an RV site fee.
Give yourself the freedom to have the money you need to pay for major expenses – we went from a couple of hundred dollars a month in gas to more like $1,500. There are also months where we stay in one place at a time and don’t go anywhere, so we don’t use that $1,500.
But we still keep the money there, because there may be one month when we’ll need the money. Like a tire blows out, and we have to use it for that.
Years ago, when I didn’t look at my debt, I would think that my student loan debt was around $5,000 – I didn’t know for sure. But keeping track of every dollar turned it into a game. For someone like me who is competitive, if I have $50 extra dollars in my budget, I would want to put it toward a goal. Just seeing those numbers go down was really helpful for us.
