Hello again friends and welcome back to my blog where I write about things that might matter to you today and that matter to me still.
Today's topic is budgeting for millennials, like myself, who are perhaps indebted with credit card debt or student loans and also have to pay bills and be an adult. Or as my dad use to say "comiendose un cocodrilo marcha atras," which means "eating a crocodile backwards." Interpret that as you may.
While I was fortunate enough to graduate college with ZERO student debt, I got myself into a significant amount of credit card debt. Capital One, American Express, Bank of America, Chase, Capital One again, Amazon Card, YOU NAME IT!
Writing that here is incredibly hard because I feel totally irresponsible for digging myself into this hole of debt, but I tell you because I want you to know that you are not alone. Whatever your reasons were for becoming indebted, at this point what matters is to not make the same poor decisions again and moving forward and paying them off. And you will. WE will.
Alright, so the most basic part of paying off debt is to put the credit cards away and live within your means. So you're not going to buy something you can't afford. And how do you know what you can and can't afford based on your income? You budget!
I mean, REALLY budget. Don't create an ideal budget where you never eat out, or buy a pair of jeans, or get your nails done, etc. Write down everything you spend money on and how much you spend. Everything from gas and groceries, to Netflix and that random app on your phone that charges you $7.99 every month. Write down all the things.
Then write down how much you actually make every month. All sources of income for that particular month should go in your budget. That means your job, side hustles, allowance, birthday money, inheritance, lottery (I WISH!).
With me so far?
Next step is to zero out that budget.
Yes! Make sure there is not a penny left from what you make. First, make sure all your bills are paid off including credit card bills. Then allot the "extra" money to savings, fun money, eating out money, hair cut money, nails money, oh-that's-so-pretty-I-have-to-have-it money.
And as you do this keep in mind your goals. If getting out of debt is your goal then try to focus all your "extra" money on making bigger payments towards a card.
No extra money after paying off bills? That's okay. Look back at your bills and see if there's something you can do without. At least for a while. For me it is Amazon Prime, Hulu, Spotify, some phone apps, subscription boxes, and other things. I ended up saving close to $100 every month.
One tool that has helped me with budgeting is the everydollar app. It's free and it taught me to do all the things I just talked about. There are also financial advisors available through your bank, school, and sometimes even your job. If you find yourself unable to make monthly payments, call up the credit companies and come to an agreement that you can meet. They would rather get something from you than nothing at all.
Let's budget budget budget and be debt free free free!
Also, hire me to do your photos so I can make some extra money :-D