How can I budget money from my first job?

Question

I have my first job and I'm saving half my money in a saving account... how can I budget the rest so that I don't blow two weeks worth of work in two days?

Answer 1

Excellent plan to start saving early. With the money left over after putting money in your savings account, figure out what your fixed expenses are (rent, utilities, commuting) and set that amount aside to pay the bills.

For your daily spending, you could use the envelope method. For a two week period, you'll need 14 small envelopes.

You could divide the amount left over by 14 and put the same amount in each envelope, but most people spend more on weekends than they do on weekdays. However you divide your spending, only spend the money in one envelope per day.

It's okay to not spend money today so you can spend twice as much tomorrow, but you'll defeat the purpose if you spend tomorrow's money today.

Good luck!

Answer 2

First, congratulations on saving! That's a great first step. Once you get your 3-6 months of expenses into a savings account for your emergency fund, you should start putting money into a Roth IRA for your retirement. Invest in a good mutual fund from Vanguard or Fidelity and just let that money sit and keep adding to it and you'll be set!

As for how to budget the rest of your money, I would take out enough to pay your bills and food expenses for the 2 weeks or month and then you can spend what's left. Carry it in cash if you like so you can see how much you have. Or give yourself a daily budget that you have to stick to. But really, as long as you have money to pay your bills set aside, it doesn't matter if you spend the rest in an hour or in 10 days. I would guess though that it would only take 1-2 times of running out of money early before you learn how to keep your spending under control.

Good luck to you. It sounds like you're really getting off to a great start! Keep up the good work. It might be a pain now, but in a few years you'll look back and thank God that you did it.

You may also want to read the article on the link below which outlines the 5 worst financial mistakes that new grads make just so you have them in your mind and can avoid them.

http://www.personalfinance101.org/?utm_source=YH&utm_medium=link

Answer 3

Like everyone else, I want to congratulate you on getting off to a good start! Do you know how to use Microsoft Excel? You can create a spreadsheet with all of your expenses in the rows (clothing, food, etc.) and each month across the columns. Give yourself a budget for each category and don't exceed it. That may mean giving up a few things in the short run, but the build up in savings will be well worth it.

When you get a big enough nest egg, look at some ways to invest it (someone mentioned some decent mutual funds). You can also go to the library and read some books by Suze Orman, Robert Kiyosaki, Ben Stein... or go to Yahoo! Finance and there are articles to keep you informed.

I was going to suggest the envelope method too, but someone beat me to it.

Stick with it!

Answer 4

First of all congratulations on your decision to save. It will pay off in the end when you have the cash for emergency needs instead of relying on credit card interest rates to bail you out. Keep at it right off the top. You cannot spend what you don't see. As for budgeting, well that really depends on your income and expenses. The main categories are: housing, transportation, food, and then disposable income. It will be different if you are paying $1,000 a month for housing or $200 a month for housing, whether you have a car or take the bus, and a million other variables. Only YOU know what your priorities are for budgeting and what your costs are. Shop around for value on what you do need and skip on the luxuries (wants) until your needs are met first and then, knowing that you have a cushion of savings, pamper yourself with things you want.

Answer 5

Not my ususal advice but since you've already saved half, your young and I assume you don't have any dependents, it's your first job and you seem to have a good head on your shoulders, I'm going to advise you to go ahead and just blow the other half on something you've always wanted or just go out and have a lot of fun(assuming you have all your bills paid and don't have any debt). This is something that you will not be able to do in the very near future as you will start to obtain more and more financial obligations...enjoy it and congratulations on your first job.