The biggest thing that shocked me about getting a real-person job and paying for all my own stuff is how many times I had to enter my social security number into online forms for credit checks and proof of identity.
Want to rent a washer/dryer? We’ll need your credit score for that. Need water in your apartment? Social security number, please. Trying to order Jimmy John’s to go? Credit check!
Suddenly, I had 5+ online accounts with my social security number (i.e., my identity and financial security) tied to them. Accounts where my negligence could result in a direct hit to my credit score—the future key to being able to buy a car, a home, and countless other life necessities.
While keeping up with utilities, rent, and various other bills seems like a relatively low-stress obligation, it’s mildly stressful during startup to realize that you’re now responsible for monitoring the status of multiple accounts with different account numbers, different due dates, different bill delivery methods and (likely) different passwords, when up until this point all you had to worry about budgeting for was your biweekly burrito bowl.
How my OCD kicked in to save the day
Clearly, I’m not a financial planner—but I did create a spreadsheet that helps structure a budget I think could be helpful for newly salaried individuals. It’s been super useful for me in setting guardrails for my spending (actually adhering to the guardrails is not as simple).
All you need to know to utilize this tool is your take-home pay (so, your salary post-401K contribution/health insurance/federal taxes/etc.) that’s on your paycheck every pay period.
The workbook I made calculates exactly how much you should be saving, spending, and using for fun each month, based on a financial planning theory called the 50/30/20 model, and it proposes that you use 50% of your income for needs (rent, utilities, groceries, etc.), 30% for wants (restaurants, drinks, amusement), and put 20% in savings.
Here's what it looks like, with no values added yet:
Once you input your salaried paycheck amount (in the blue), it’ll auto-populate the total amount of money you have in that pay period to be spending responsibly in the three purple cells across the top (usually this is roughly every two weeks). It’s helpful because most bills are due on a monthly basis—so it’ll tell you how much of each individual paycheck you have available to spend and save.
The tough part is, predictably, actually sticking to it.
The categories included are the broad ones that I use, but obviously feel free to personalize as little or as much as you think would be beneficial to you.
If you don’t have a budget or any idea how to make one, I’d recommend using the table to calculate these figures as a baseline and then—if you want to get super control-freak—plug those numbers into a Mint account (I blogged a few months ago about how to set up your budget and link your accounts in Mint—for a refresher, you can check it out here) to track your spending.
In case you missed that one, Mint is an Intuit product that links to your checking, savings, and credit card accounts and then tracks your spending and categorizes it for you. You tell Mint how much you want to spend per month in each category, and it warns you when you’re about to go over budget.
The most useful feature, in my opinion, is the auto-categorization. This way you can see your spending at a glance without having to track it yourself.
Once you know your total allotted portion to spend, you can break it down into subcategories—e.g., $1,000 for rent, $280 for groceries, etc. Then you can ensure you’ll have enough to put 20% in savings every month! And you can guiltlessly spend on bars and restaurants, because you’ll know exactly how much you have allotted to spend without dipping into your savings.
I'm planning to write another budget-related post soon on how to build your first professional wardrobe without having to sell one or more of your organs (and still look fly at work), so stay tuned.
Download the workbook below, plug in your take-home pay, and use the budget tool. Happy adulting!
The young woman's money guide to all the things you're too embarrassed to ask your friends. Build the life you thought you were too broke to afford through managing your spending habits, travel hacking, and simple, smart investing.
Full-time Brand marketer at Southwest Airlines, part-time Yoga Sculpt teacher, occasional Waffle House Model and reformed materialist.
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