When I moved out, I realized in order to live on my own, you could almost never be home. You had to go to school from morning to evening, go to work from evening till late night and when you sprinkle in homework, laundry mats, clubs at school and extra hours at work you have yourself a big no-fun-time pie.
On top of that, I was having a hard time even paying my rent. I went days of collecting my change to eat my meals out of vending machines. The kicker was, I was working full-time as a server at the nicest café in Beverly Hills.
Where was all of my money going? Obviously not in my bank account or I would have been eating real food.
Something they should have taught us in high school was how to make a budget.
I had absolutely no idea how to balance my checkbook, set aside a rainy-day fund, map out the days of the month I had to pay bills or even how to write out a check when I graduated from high school.
Luckily, I was blessed with an amazing family, but when you move to a new city without them, it’s really not their responsibility to take care of you anymore.
If you have ever had trouble paying your rent you know the sick-to-your-stomach feeling. In 1943, a man named Abraham Maslow created something called Maslow’s Hierarchy of Needs, in which he states a basic need, before you need love and belonging or even self-actualization, is the feeling of safety.
These feelings of safety include personal security, financial security, health and well-being.
If you aren’t able to pay your rent all of those are compromised.
If you’ve been in that situation, maybe you’re like me and Googled what organ you don’t absolutely have to have and can sell on the Black Market. Maybe you even thought about the proximity of the nearest strip club (just kidding mom) and calculated how much the ladies and gentlemen of the night make.
I mean I already had the cheapest place I could find, why was this happening? Whatever has briefly crossed your mind, I’ve been there. And the way I fixed it was simple. I realized I wasn’t structured in my spending so I was essentially throwing money away.
The way I set a structured budget for myself was simple. First, calculate your fixed costs. This includes the bills that don’t vary much from month to month such as rent, utilities and car payments. Also include subscriptions such as Netflix and gym memberships.
Now take a look at what your take-home pay is. The rule of thumb I made for myself is fixed costs should be no more than 50% of your take-home pay. Now is there anything you can trim out of those subscriptions? I cut out the gym because I knew I could either go on runs or work out at school. Twenty percent of that should go to a savings or shoebox and 30% of it should go to food, gas and extras.
It’s easy to think you can live off Top Ramen and only spend $594.72 on food for a year or get your whole closet from a flea market, but that’s just not realistic. When you are structured and completely stick to a budget, it’s easier to pay your bills and rest as ease.