Using an Excel spreadsheet can be a great way to track your spending, income, and overall net worth. However, it can also take time, and unless you have a weird obsession with personal finance like myself, you probably won’t have the motivation to frequently update it. So what do you do?
You get Mint.
I wish Mint was paying me for this, but sadly they are not and I just love their app. Mint is an app/website that allows you to connect your bank accounts, credit/debit cards, investment accounts, bills, etc. and it will track them for you in real-time. It can show you all your recent transactions, the amounts in virtually every account you own, and any upcoming bills you have to pay. Additionally, you can create budgets in the app and categorize your spending so you know where you can cut back if you find yourself running out of money every month. It can also track your net worth, which can be really fun and addicting to watch as it grows. Mint really is a one-stop-shop for everything personal finance related and it takes way less time than constantly updating an Excel spreadsheet.
Back to the Basics of Budgeting
Mint can be an incredibly useful tool, but not if you don’t know how to budget. Even though budgeting can feel overwhelming, it is quite simple. Once you get your budget set-up and get used to the feeling of limiting your spending, it will feel like second-nature. It all boils down to Revenue > Expenses. Your income from all sources must be greater than your total spending (even on necessary expenses). If you are not finding this balance yet, do not stress as there are changes you can make to get yourself there at almost any income level. The first step is to focus on reducing expenses which is typically easier than immediately increasing your revenue.
Lowering your monthly expenses can make a huge impact on your ability to budget and save money every month. First, track your spending for a month using an app like Mint and record every dollar that leaves your wallet, whether it is for drinks with friends or an ugly water bill. This will allow you to see where changes need to be made so that you spend less money than you bring in. Next, look at discretionary expenses, such as those drinks, or routine Poshmark purchases. If you discover that you are paying for things that don’t add that much value to your life, cut them out, or at least put a limit on them. For example, I realized I was paying $6.99/month for a Disney+ subscription while only ever using it to watch The Mandalorian. As adorable as Baby Yoda is, I don’t think he is worth $84 a year in my life. After you have taken a hard look at your discretionary expenses, it is time to see how much you are paying for necessities. These may include rent, utilities, groceries, car payments, insurance, etc. While these may seem like fixed costs, I am confident that everybody can find reductions in at least one of these areas. There are a variety of ways to do this, whether it be moving, getting a roommate, shopping for groceries at Aldi instead of Whole Foods, or calling around different insurance companies to find the best rates. Finding ways to lessen your expenses is something you can do right now, whereas increasing your income may not be as easy.
Earning more money can go a long way in making sure that you are taking in more than you are spending. While we all want to be paid more, our employers are not always willing to do so. If you aren’t able to get a raise right away, you may have to work a few more hours per week, or even find a new job that pays a bit more. Other side incomes may be necessary. Consider earning more by taking part in the gig economy through services such as Airbnb, Uber, Task Rabbit, etc. I also recommend you increase your skill set with free courses online. There is a video for everything on youtube, and you can learn virtually anything without spending a dollar. You could learn how to fix bikes (a skill highly valuable during this pandemic), home maintenance (save money on a plumber), or even how to cook (and save money by not going out for food every night).
There are also more intensive courses to help find a new job or start a business. Check the bottom of this article for a list of 150 courses provided by Google at no cost. These courses cover everything from marketing a business in foreign countries, to understanding ad revenue, to learning how to code. Most importantly, don’t pay for any “online educational courses” because there is so much valuable, FREE information out there. The only exception is if you were paying for something that required an investment such as getting your real estate license or becoming a notary.
Why We Budget:
While everything discussed above may have a significant impact on your life and may seem difficult at first, it is most certainly worth it. By starting budgeting early, you can open so many doors later in life. Successful budgeting allows you to grow savings, start investing, and feel control over your life. It is one of the most essential steps to reaching financial independence and being able to do whatever you want without having to ask for someone else’s permission. So now, download Mint on your phone, and start tracking your money today for a happier life tomorrow.
List of free Google Courses: https://learndigital.withgoogle.com/digitalgarage/courses.