Rocking a Budget (and why you have to)

Mar 21st, 2010 | By Allison | Category: Finances, Life After Graduation

Life After Graduation. LAG. It seems fitting for most people, sadly enough. It was for me, at least. I’m a pretty goal-orientated person, and I also consider myself very financially responsible. But nothing in college prepared me for dealing with my finances in the real world. I was thrown to the lions and given a stick to fight them off. Not even a damn pointy stick. We’re talking twig-caliber here.

Of course I realized that I would have bills. Duh. I wasn’t exactly bill-free in college. Let me tell you this though: when I was in college, deciding whether to get the $12 case of cheap beer or splurge for the $25 case of better beer seemed like a big deal. We’re talking a $13 difference here. Now that you’re in the real world, or approaching it, it’s more like hundreds of dollars of difference. Should I rent the $500/month apartment that smells like cat pee or the $1000/month apartment in the good part of town? Should I shop at the close-by, organic supermarket and spend $200 on groceries or should I drive a few miles to the Super Wal-Mart and spend $125 on the same amount of food? Should I buy $10 store brand hair dye or pay Mastercuts $150 to ensure that my hair doesn’t turn orange?

Eff you, Mastercuts, and your ridiculously high prices for really good color jobs that I can’t seem to find elsewhere.

Anyway, these are the questions you’ll face (although, yeah, whether or not to spend the extra $13 on better beer does still come up from time to time). You need, need, need, need, need to learn how to rock a budget. Need. Did I say that? NEED. That’s right, I brought out the italics, bold-facing, and caps lock.

Right now, sit down and list all of the monthly bills you have, and their approximate costs. I’m not kidding. Why are you still reading this? Seriously, do it.

Now add groceries to that list. And gas. And don’t forget that your student loan repayments will start about six months after graduation, if they didn’t start yet.

Total it up. Look at that number. Whatever you have, add thirty percent. In other words, take your total, divide by three, and add that number to your original total. Because dude, ya gotta pay taxes, and it sucks, but if you’re a full-time freelancer and you don’t budget at all for taxes, you’ll be up shit creek without so much as a spoon, let alone a paddle.

Why you’d want a spoon when you’re up shit creek is beyond me, but that’s not the point: the point is this. That number, whatever you have, that’s the amount of money you need to make to survive, to break even. That’s if you don’t spend any money on “extras” like going out for drinks, buying shoes, or pre-ordering your favorite video game. If that’s all you make, you have no money to spend on your significant other, renting movies, or buying birthday gifts.

Now here’s the most important step: DO NOT PANIC.

Yes, I know that the number before you seems impossibly large, but I promise you that it only seems that way right now, since you’re used to having very few bills in college. If you’re on the verge of tears, think of it this way - at least you know. Imagine if you wouldn’t have sat down and listed your bills to get a total. Imagine if you would have just went your merry way, spending willy-nilly and ringing up purchases on your credit card.

What? Rent’s due in two days? *Looks at bank account* Oooooh, shit.

In later posts, you can bet your bottom dollar that I’ll be talking more about budgeting. I’m even releasing an ebook for you all that will teach you how to create a awesome budget that has you sticking money away every month. You wanna buy a house or plan a wedding or go on a cruise? Awesome, I’ll should you how to make that happen. I’m going to Orlando in May, and that’s not something I would have ever been able to do as a few freelancer.

So, I guess what I’m saying is “stay tuned.” For now, realizing that you need to do a little financial planning is the first step, and a big one at that. *Pats you on the back, or on the ass if that’s how you want to roll* Good job, good job. GO TEAM.

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