So you blew your budget

Despite meticulous, careful planning, I seriously blew my Christmas shopping budget this year. The biggest reason is that family grew on a few sides — like, last year I bought 12 or 13 gifts total and this year I bought 26 just for family. Plus some gifts cost more than expected, and being busy meant I didn’t make as many presents this year as I usually do.

None of those things are bad, but as someone who is very careful and intentional about finances, it does create a bit of a dilemma. Luckily I’ve found a few things that help bridge the gap.

First, the standard disclaimer that I knew everyone’s financial situation is different, which can make well-intentioned gift giving even trickier than finding the right idea. We all want to give something the person will enjoy and feels nice, but don’t want to break the bank or go too extravagant.

For emerging adults in particular, we’re usually considered grown-up enough to be expected to choose/buy gifts for people on our own, but often non financially established enough to be able to comfortably afford that. Which proves a sticky situation this time of year.

Also, I have some issues with the materialism and the contractualism that have seeped into the holiday season for so many of us, but at the end of the day, I still like giving loved ones gift that hopefully make them happy in some way. So we’ll start off with some ways to save when holiday shopping:

• Gifts in bulk. I hate giving duplicate gifts, but I also have a crap ton of family. My way around this is usually to choose a category of gift and then try to individualize them for each person. For example, personalized ornaments or a batch of sweets with a note about why I’m grateful for them.
• DIY when wise. Sometimes, DIY can prove more expensive and more time-consuming than just buying, but if you can do it cost-effectively, it can mean a lot to people that you made something for them rather than just going to the store and buying it.
• Memories over stuff. Connecting a small gift to a memory or meaningful moment can be a lot more special for a loved one than stuff at all. Experiences, photographs, or even their favorite candy bar with a note show that you care about and know them, not just that you can buy stuff for them.

Sometimes, of course, it’s too late to save. Or just plain hard. I could have gone less overboard with Christmas shopping this year, but I’m not sure I could have stayed in budget, and the closer I got the more I’d be unsure if I was getting each person enough (again, the contractualism thing). So what about after the budget has already been blown?

Here are the most useful methods I’ve found for recovering from going over budget:

• Cut back in other flexible areas (aka fun stuff). I went over budget on Christmas shopping, so I won’t get to eat out for, like, a couple months. I still have to eat and I’m not going to avoid all fun activities, but I am cutting back quite a bit on what was already a small budget (fun spending makes up about 10% of my monthly budget).
• See if there are areas you can redistribute. I overspent on Christmas this month but needed way less gas than usual. So I moved some funds around in my budget and brought the deficit down a little.
• If it’s worth it, it’s okay to pull a little from savings once in a while. Savings isn’t meant to be hoarded forever — but it is meant to be used with careful discretion. I try to save 30% of my income every month (and fully realize that isn’t possible for everyone, though saving some is), and try to only dip into it for large expenses like a vacation — still, of course, setting limits on how much. But I put a little less into savings this month so I know that it’s covered, and because I’ve already saved carefully and doing so doesn’t threaten my emergency fund.
• Don’t compromise what you shouldn’t. Your bills still have to get paid. For me, how much I donate to charity or people in need every month is also non-negotiable, and not something that consumerism (no matter how holiday-themed) gets to threaten. Those things come first, period.
• Adjust your budget so you don’t do it again. Few categories of purchase are truly one-time things. So if something ends up costing more than you realized, adjust your budget accordingly so that next time you’re ready. In my case, I’ll be cutting back slightly on fun spending throughout the year as well as lowering the budget for each gift to make sure I’m in a better spot next year.

How do you avoid going over budget, and how do you handle it when you do? Let me know in a comment below, on Twitter @ohgrowup, or Instagram @oh.grow.up! Thanks for reading, and have a warm and happy holiday season!

(Photo is a free stock photo because I am definitely not done wrapping gifts.)

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Making a budget 101

Happy Sunday! I’m back with some practical advice, this time regarding budgeting. I’ve written posts in the past about saving or budgeting for gifts or friends, but realize that I haven’t actually talked about making a general budget yet.

Why have a budget? The short answer is because you spend money. Even if you don’t buy much beyond what you need, it’s the best way to make sure you’re on track with savings and building good financial habits for the future. If you like to spend, it’s those reasons plus making sure you don’t overspend. It’s a way to keep yourself accountable — starting as an emerging adult — so that if you ever want to travel, buy a house, have kids, or retire you can actually, y’know, afford it.

Our generation is strapped with high costs of almost everything and staggering amounts of debt. There isn’t always much we can do about where we landed. But we can do something about where we end up.

As always, the disclaimers: No app or service I mention is sponsored, and I’m not compensated in any way. I only mention specific names because myself or someone I know has found them useful, and hope that others will too. None of my advice is ever all-encompassing. You gotta do what works for you, but I hope this serves as a helpful starting point.

With that out of the way, let’s jump in.

Step 1: Research

Do you know how much your cost of living is? Do you know how much you spend in various categories every month? Those basics are the first place to start. Before I set up my budget for the first time, I had been carefully tracking my spending over the course of several months.* I used that data, plus some info from my parents regarding the costs of food, insurance, etc. to figure out ~about~ how much I needed to account for in various categories every year. Once I had the rough annual cost of each category, I then just divided each category by 12 and ta-da! I had a monthly budget.

Step 2: Setup

I use the free version of an application (I just use the website) called EveryDollar. It’s not perfect, but it’s easy to use and lets me be as detailed or as general as I want. The downside is that unlike apps like Mint — which I tried but didn’t love — you’re responsible for inputting whatever you spend. The good or bad part, depending on your perspective, is it’s not linked in any way to your bank account. So there’s no risk, but it also doesn’t do anything for you except serve as a really helpful, less-ugly spreadsheet.

I’ll be honest. I spend several hours every week budgeting and tracking my finances. But I’m the least stressed about money that I have been since my early teens, so it’s more than worth it.

Below is a loose approximation of my budget, with all the relevant categories. Note that the costs of things per person can vary wildly, so take it with a grain of salt, but I have noted in parentheses what percentage of my income is relegated to these categories.

LIVING

Rent (23%)

Utilities, including wi-fi and phone (3%)

GIVING

Donations (10%)

FOOD

Groceries (6%)

Eating out (3%)

TRANSPORTATION

Gas (5%)

Car repairs, misc. (2%)

INSURANCE

Includes auto, renter’s, health, life, etc. (5%)

SAVING

General (25%)

Specific goals, i.e. car replacement (6%)

[Note that retirement savings is taken out of my paycheck automatically, so it doesn’t appear on this list, but it’s 8% of my gross income]

LIFESTYLE

Clothing, toiletries, haircuts, etc. (2%)

Furniture, household items (3%)

Entertainment, spending money, misc. (4%)

GIFTS

Christmas, birthdays, weddings, etc. (4%)

I realize that’s 101% based on rounding, but bear with me. I also have to spend less of my income on rent than a lot of my peers, which gives me more room to save. But notice all my “fun” stuff — eating out, shopping, etc. — accounts for less than 10% of my monthly budget.

So while I will never say “stop eating out and you’ll magically be able to buy a house,” which is simply not true, I would advise caution and relative frugality with finances. Fun is still allowed! I go on trips and eat out with coworkers. I buy a new piece of clothing if I really want it. But the budgeting part is just putting parameters on how far that can go.

Also I didn’t put a category here for debt, because it runs on a simple rule: Pay it off as quickly as possible. Cut down on fun items, and cut back a little on saving, until debt is paid off at its appropriate pace. For example, credit card debt should be paid off as quickly as possible because it has crazy high interest, but student loans can be paid off more slowly. Being in the black is more important than saving a huge percentage of your income.

Step 3: Adjustments and future planning

I adjust my budget every month. I don’t start from scratch, of course. But if my income is higher from a freelancing project, or I know I’ll be spending more on gas, then I can up one category and lower another, and so on. Everything hovers around the percentages I mentioned above, but it’s completely okay to adjust your budget with your life.

Of the money I save every month, some is for retirement, some is for emergencies, and some is for specific goals like when I’ll eventually have to buy a new car. But a lot of it is just general. Because then, when I want to go on a big trip or if I ever decide to buy a house, I will be much better prepared for having started early.

I know that was a long post, but I hope it proved helpful to you. I want emerging adults, both my generation and younger, to be able to do better than the financial situations we’ve grown up seeing. This is where that starts.

What are your favorite budgeting tools or tips? Are there any questions you have about finances as a young adult? Let me know in a comment below, on Twitter @ohgrowup, or Instagram @oh.grow.up! Thanks for reading, and good luck adulting!

 

*For the spending tracking, I literally just used a Google sheet and tracked notes and amount of all money that I spent or received. It was a little painstaking, but very helpful.

(Photo is a free stock photo because this was way cooler than my ideas.)

Gotta budget for your friends’ lives too

Back to budgeting! Emerging adulthood is tricky. In the midst of learning how to handle and manage our finances, we often forget necessary budget items. Maybe you consistently save for car repairs, but not for car replacement. Maybe you forget to calculate a trip you have planned for into your month’s eating out budget. But one of the big ones we often forget — and frankly, one of the ones that’s hardest to plan for — is budgeting for friends’ lives.

There are mostly big occasions for this: birthdays, graduations, weddings, babies, and the like. For example, I’m going to a couple of friends’ weddings in the next few months, and am realizing that I had not budgeted enough in the “wedding gifts” category. Many weddings also require travel, lodging, and new clothes (especially if you’re in the wedding party).

I’ve been thoughtful to budget for Christmas, but hadn’t quite planned for the fact that late spring brings, in quick succession, four important birthdays and now a few weddings.

So what to do when you go over budget?

First, don’t panic. Be mindful not to go too over budget, but it’s the kind of thing that’s going to happen now and then. You can’t plan perfectly for everything. So take a deep breath.

Try to minimize spending where you can, and/or pull funds from other categories. I won’t be spending as much on food (particularly eating out) or miscellaneous things the next couple of months in order to help offset the costs of big friend events.

Prioritize, and say no if you have to. I’ve had to say no to attending events because the travel and/or other costs were simply too much amidst other events or commitments. It’s a bummer, but it’s a spot that everyone is in at some point or another, so your friend(s) will more than likely understand.

Figure out how much your budget was off by. Then you can adjust it for the future. On that note, it’s also a good idea to have some general, “extra” savings for times like this so when you go over budget you’re pulling from excess or flexible funds instead of necessary ones.

We try to plan for as much as we can, but it doesn’t always work. When it doesn’t we adjust. It may mean adding more to that budget category in the future or stocking away a little cash, but there are usually ways to make sure we’re there for as much as possible of friends’ important moments.

How do you address budget spikes? Let me know in a comment below, on Twitter @ohgrowup, or Instagram @oh.grow.up! Thanks for reading, and happy adulting!

The big move

So there was no post on Wednesday because I moved! It’s been a long time coming and I’m (mostly) settled in now, which means a new chapter is starting that I’m very excited about. However, the process of moving is always, ahem, interesting.

Moving itself doesn’t scare me — I had moved more than 19 times before I graduated high school. All of that, plus moving most of my stuff twice a year during college, has made me kind of an expert. But this is the first time I have moved all of my stuff to a whole new region, several hours from where I’ve lived most of my life.

Luckily, I’ve been planning and prepping for a while. I started planning for moving out when I was 7 and put dibs on the plaid couch my parents wanted to get rid of (spot it in the picture above), and I haven’t really stopped. Of course, the last couple months have been the bulk of actually making it happen, as opposed to just daydreaming and reserving old furniture.

The good news is I know the area a little and I’ll be living with people who 1) I know, and 2) I like hanging out with. But it’s still real intimidating the first time you move out, or any time you move. To help me process it, and hopefully help someone else in the future, I’ve made a list of my favorite pieces of moving advice:

Plan, plan, and then have six backup plans. This is partly just my nature, but I want to know all my options, rank them in order of preference, and then have contingencies in case things go wrong. This could be in terms of where you live, who you live with, when you move, etc. For example, before this move, I had a list of housing options, rooming setups, and had at least three possible timelines for when all of that would go down.

Do the math. Aka know exactly how much you can afford, and how much you cost. This means household stuff, clothes, food, going out, saving, gas, insurance, phone, and the like need to be part of considering how much you have to spend; it’s not just rent and utilities. If you know how much you’ll be making, start subtracting. (I didn’t, so I did the math backward to figure out what my job needed to pay to make it work.)

On that note, rent isn’t the only thing you’re going to be paying. All places charge for rent and utilities, and no one lives without wifi these days. Make sure you know which utilities you’ll be responsible for (for example, my new place covers water, trash, and sewer, but my roommates and I are responsible for gas and electric). Many rentals — particularly apartment complexes — also charge for parking, pets, and laundry. Some places, mainly houses, have Homeowner’s Association fees, so be sure to be aware of that. And if you are renting, get renter’s insurance. Most places require it, but either way it’s usually an inexpensive way to cover yourself.

Weed out your crap as you pack. I have too much stuff, and I’m willing to bet most of you do too. It’s more to move, and more to unpack. Get rid of anything you don’t have a darn good use for or massive sentimental attachment to — your new living space will thank you. (Pro tip: You can do a second round of this as you unpack, but know that it’s usually less effective on this end.) As proof, I got rid of at least four trash bags full of stuff (some donated, some just trash) when packing, but so far in unpacking have only found four small items I want to ditch.

Ask people for empty boxes. I lucked out in that family and friends offered me a ton of boxes to pack, so I ended up not needing to buy any. But it’s an inexpensive way for a lot of people to pitch in, and then you can save money for bigger purchases.

Pack smart. In other words, organize it as you pack. Actually label things. Know where the most important things are (especially documents and electronics), and keep them safe throughout the process. Fun fact: During one move when I was little, I was instructed to put anything I really didn’t want to lose into one box, and then that box proceeded to be lost for more than 10 years. Don’t let that happen to you. If you have some stuff that is going to keep being stored when you get there, put it in a plastic tub instead of cardboard boxes. Wash all your bedding before so you can just make the bed when you arrive. Wrap breakable items in literally anything soft and then know which boxes to handle carefully. For this move I put the most delicate and important items in my car so they wouldn’t be at risk of damage or loss in the moving truck.

Coordinate supplies with roommates. If you’re moving in with people, talk ahead of time about who has what. Nobody needs three vacuums and two toaster ovens and four coffee tables. This can also be a good way to make sure you aren’t missing a couch for the first two months. My roommates and I had a Google spreadsheet to keep track of it, which was really helpful.

See if people you know are getting rid of furniture. Ikea is cheap, but friends are cheaper. Because my family is tolerant of my penchant for doing this, I moved out with a couch, dining room table and chairs, full dish set, armchair, bed, and a few small bookshelves. Roommates brought a coffee table, dvd player, more chairs, and some other things their families didn’t need anymore, and now we have almost everything we need.

Decorate slowly. Do not go out and blow your budget on decorating right after you move in. First, find a place for everything you have. If it really doesn’t go anywhere, consider getting rid of it. Then, buy anything you really need. For one of my roommates, this meant a bed. Since none of us brought a tv, we also made that an early purchase. But art and accessories should be added slowly, for the sake of your space and your budget. I will admit that I am bad at this, but it’s a reliable way to rein in the budget on what can be an expensive process.

I’m going to do my best to keep posting regular, and am very much looking forward to a new phase of emerging adulthood. If there are any topics that you want to see featured, let me know in a comment below, on Twitter @ohgrowup, or Instagram @oh.grow.up! Thanks for reading, and good luck adulting!

Boring adult stuff (that’s actually good to do)

Today we are back to the practical. Sometimes adulting isn’t fun. Sometimes it’s being your own inner parent and doing all the responsible stuff. It has occurred to me that a lot of emerging adults — myself definitely included — are still skill-building in that area.

I’m not talking crap; we’re all still learning, and I know a lot of established adults that don’t know how to do or don’t make a habit of all the things we’re going to talk about. Last disclaimer: This isn’t a comprehensive list. But it’s a big first step.

Documents/finances

• Make a budget and track your spending
• Save donation receipts (and any other relevant crap) for taxes. Here’s a list of what some of that crap might be:
  • Donation receipts
  • Pay stubs
  • W-2, W-4, W-9, or any other government income forms that apply to you
  • Receipts or record of other tax deductible items
  • School-related financial info
• On that note, file your financial junk/important docs for when you need it, especially your birth certificate and social security card
• Build up an emergency fund (3-6 months of expenses)
• Research investing/retirement saving (and then start doing it as soon as you can which means take up any employer matches asap). Talk to people at various ages to get a solid range of advice
• Pay for/renew stuff slightly early whenever possible

Home Ec

• Cook some decent stuff. This means actual recipes, and quick fixes like making a simple roux (for which I honestly just make a paste of flour and a little water to thicken sauces, or cornstarch if you don’t want to use flour).
• Clean the bathroom and the kitchen WELL
• Make a bed properly
• Do your laundry properly
• Iron a shirt
• Sew a button
• Buy a good vacuum. Seriously
• You don’t have to buy name brand everything, but some of them are worth it — like stain cleaner (Tide, Oxi-Clean, Zout)

Fix-it

• Be able to check your oil and fill your tires on your own
• Take your car in for basic maintenance (oil change, tires rotated, etc.). There are almost always coupons for these services so be sure to look/ask
• Hang a picture straight
• Know where important house stuff is (fire extinguisher, electrical panel, fuse box, hot water heater, etc.)
• Build Ikea furniture — this is as much about following instructions as handyman skills
• Have a freaking tool box: hammer, small rubber mallet, Phillips and flathead screwdrivers, measuring tape, level. Buy them just before Father’s Day or Black Friday to get good deals on quality ones — this would be a cool thing to ask your dad/parent to help you with for bonding

Get *cultured*

• Learn to ask good questions about people, current events, etc.
• Learn tricks to remember people’s names in a conversation
• Media freakin’ literacy
• Read actual books
• Buy a decent bottle of wine (especially if it’s a gift)
• Do not tip your server less than 15% at a restaurant. Servers are often paid less because of tips, so they rely on them to make a living wage. Typing your bill total x 0.15 in your calculator will tell you the correct amount to tip

Misc.

• Know your/your family’s medical history
• Handle your healthcare
  • Dentist every 6 months
  • Optometrist every 2-3 years if you don’t need glasses, 1-2 times per year if you do
  • Primary care doctor every 2-3 years if you’re healthy
  • OB/GYN every 2-3 years
  • Also, TELL YOUR DOCTORS THE TRUTH. They’re not gonna judge, and they can’t help you if they don’t have all the info
• Register to vote PLEASE
• Be an actually informed voter! This means reading your voter information guides (often on state, county, or city websites), researching propositions and candidates, looking at arguments from both sides, and looking at who is funding a campaign — especially the last one can often give a clue as to the intentions of a measure or candidate
• Update your vehicle insurance and actually put it in your car
• Figure out how different forms of insurance work. (At least kinda — I’ll have some more info on this one coming later.) Here are some of the most common types:
  • Health
  • Dental
  • Vision
  • Life
  • Renter’s/homeowner’s
  • Car or other vehicle

I realize several portions of this post were U.S.-centric, so I apologize if any of the info was less helpful to readers who don’t live in the States. If there are any of these that were vague, ones you’d like to hear more about, or ones that I missed, let me know in a comment below, on Twitter @ohgrowup, or Instagram @oh.grow.up! Thanks for reading, and good luck adulting!

Traveling on an actual budget

As promised, here is the post I mentioned about traveling! The last three weekends I have taken trips of some sort, and it occurred to me that traveling is probably one of the most desired and difficult things for emerging adults to pull off. Especially when looking at the Instagram accounts of other people our age and wondering where the heck they got the money (and/or time off) to hit up such insane destinations.

Here’s the disclaimer: None of my trips were holy crap levels of cool, and I wouldn’t have been able to afford them all on my own. But each is still a good look at managing to travel without draining one’s bank account.

Weekend 1: The Day Trip

Length of trip: 6-8 hours

Total spent: ~$50*

My brother and I went to some local farms about an hour away from my house that offer craft fairs, apple picking, and other fall-related activities. Main costs were activities (who doesn’t want to make a candle and pick organic tomatoes?), gas, and then some food.

Weekend 2: The Big Trip

Length of trip: 4.5 days

Total spent: $111.38*

After almost 3 months apart, I got to fly to Maryland to visit my boyfriend for a few days. Overall, the trip cost much more than the number listed here, but the flights out were a gift and my boyfriend paid for way more than his fair share, so that brought the number down. Most of this cost is food and Lyft rides around parts of Washington, D.C., where we spent that Saturday.

Weekend 3: The Road Trip

Length of trip: 3 days

Total spent: $125.42

As mentioned in last week’s post, I took a trip to my old college for the first time since graduating. The drive was about 7 hours each way, and I stayed for 2 nights at my friend’s apartment. Most activities were free, so food and gas were the only real costs. On the way back I picked up another friend headed the same direction, which helped cut gas costs.

*I’m omitting the cost of any presents I bought because while it did impact my spending, it wasn’t necessary to the cost of the trip and technically comes out of my gifts budget.

Here is my advice, condensed as much as possible:

• Driving is often cheaper than flying, and then you still have transportation when you get there. As a rule of thumb, if you’re going alone and can do the drive in one day, consider driving. If you’re going with two or more people and can do the drive in three days or less, consider driving.
• If you are flying, search around for airline prices. There are tons of discount airlines, but even the bigger names have fare sales and such, which can be great if your dates are flexible.
• Find a couch to crash on. I am constantly updating a list of people I know in various cities, states, and countries so that if/when I end up there, I can pretty please ask to crash on their couch. Do offer to buy them a bottle of wine or take them out to eat as a thank you, but it’s way cheaper than a hotel.
• Don’t eat all your meals out. The big trip I talked about above was an exception, but usually I try to limit traveling to one meal out per day. For the day trip, we packed a lunch and only bought a snack, and for the road trip I spent a whopping $47.43 on 3 days of food (which included drinks). Pack snacks or small meals, and don’t be afraid to go to a grocery store or market instead of a restaurant.

It’s also worth noting that each of the trips above could have been done more cost effectively, but also that I wouldn’t have been able to afford either of the latter two without other people being generous. After three consecutive weekends of travel, I’m also cutting back on spending for a while. I’m definitely not the expert on inexpensive travel, but being able to travel is important to me, so it’s something I’m going to keep working on.

What are the best tips you’ve learned for traveling on a budget? (Also I’m not asking facetiously, I really would love to hear them.) Let me know in a comment below, on Twitter @ohgrowup, or Instagram @oh.grow.up! Thanks for reading, and I hope you go somewhere cool this week!