Budgeting — Advice From A Millennial
Hello and Happy New Year! I still can’t believe it’s really 2022. It doesn’t roll off the tongue quite right. Anyways, today I wanted to discuss my spending habits, budgeting tactics, and give insight into the importance of financial literacy and planning appropriately. Although I am not a professional in this space by any stretch of the imagination, I have had the privilege of observing the budgeting tactics of my mother, and those closest to me for many years.
My mother is someone who has the best intentions for me and her family, is extremely intelligent, kind-hearted, a follower of God, and would put others before herself. With that being said, she is and always has been a frugal spender; monitoring her finances with a keen eye. Ever since she brought me over to the US, she looked for the best deals in retail and grocery stores, investment opportunities through real estate, sought out multiple passive income stream opportunties, and avenues that would set herself and her family up for the future. Through her, I learned about the importance of budgeting and how critical it is to be in the present moment — how the expenditures of today can affect the events that follow.
I’m sure all of you are familiar with the concept of budgeting. If not, that’s okay because I’ve got you covered. Simply put, a budget is a financial plan for a defined period. From a technical standpoint, budgeting provides a systematic way of reviewing estimated with actual results, coordinating future activities, and setting realistic targets. It is an effective management tool that provides a time frame required to control finances.
“Systematic way of reviewing estimated with actual results, coordinating future activities and setting realistic targets.”
As a lone 24-year-old male adult living in a townhouse in the Greater Seattle Area, I have learned the benefits of maintaining a budget tracker and the stark reality of making a living in 2022.
I am currently a contractor working for Microsoft as an Administrative Assistant as part of the USCIS Immigration Team. Previously, I lived in Tacoma, WA, and worked for Core & Main: taking on the duties of a warehouse associate — assisting customers, seeking out materials, packaging them, and distributing them on trucks, among other tasks. Last year I learned how to live independently, pay my bills, work a 40-hour workweek consistently while maintaining good health and optimism for the most part. I was adulting, learning, and growing.
In relation to Seattle, the cost of living in Tacoma was dirt cheap — from gas to groceries, and of course, the dreaded expense of rent. Unlike Seattle, I didn’t have to worry about paying my rent, my car insurance, dental and student loan expenses — because I avoided them. Moving on … With the extra money in my bank account, I was able to pursue a few interests of mine with the main one being investing in the stock market.
The stock market was booming through the months of October to March. It was pretty much a real-life re-inaction of Wolf of Wall Street. People were getting rich, TESLA soared for the moon, SPAC’s were introduced, and mayhem broke loose … until the hedge funds got involved with the GME and AMC action. Let’s just say I made a few too many bad decisions and lost a couple of grand during the thick of it. As I always tell myself, it’s all for the experience because now I know what not to do — stay away from Webull and Robinhood.
In addition, I found out that it was really easy to accrue expenses through subscriptions. I know, go figure. I should have known … but here I am a year later reflecting on it all, making changes, and adapting. New year, new me, am I right? Okay, cringe, but whatever. Last week I realized I was spending $100 a month on subscriptions I wasn’t even regularly using anymore. Thanks to the budget tracker I developed, I was able to save myself money that could go towards stocks, my podcast subscription, dates with the Queen of Puyallup, and the heap of medical costs piling up … I like sugar, let’s not talk about it.
When I lived in Tacoma, I matured, grew, understood myself, and got a really good idea of the things I wanted to pursue going forward. I ended up partaking in a business competition hosted by PLU, which was free. I trained for the Portland Half Marathon for four months and raced it. It was $150, but I secured a free race entry for next year. The lesson here is that by investing in yourself, you get rewarded. Something like that. Then, in October of 2021, I decided it was time for a change of scenery. I began to outgrow Tacoma — especially since I lived right by the university that I attended two years previous. I wanted to live more independently, take on more responsibilities, and learn how to budget under stricter guidelines. Most people don’t generally move to more expensive areas, however, I’m built different —I like the struggle. In all seriousness, I knew that budgeting was an important skill to have, and learning how to do so would deem invaluable in the long run.
I moved into a townhouse based in Tukwila, WA in December, and have one roommate that knows how to secure the bag — he works for Boeing as an FTE mechanical systems engineer. I hope to be like him someday … no, but it’s a good situation I’m in and I am fortunate to have found a good place close-ish to work. My favorite grocery store is half a mile down the street, there’s a library, a Wallgreens, and a fitness center a couple of miles down the road. What more could I really need? Well, more money and freedom, but don’t we all?
With all that being said, with the cost of living in Tukwila being about 50% higher than in Tacoma, I sought out to create a budget tracker using Google Sheets (sorry Microsoft) to illustrate my expenses.
In my budget tracker, I have a section that includes the “Day” I am being charged for an expense, the “Service” I am paying for, the “Cost” of that service or activity, the “Frequency” of a service or activity happening every week, the “Payment Type” — either Fixed or Variable. Fixed refers to the price of a service staying constant every month; car insurance, rent, subscriptions, etc., unlike variable costs which fluctuate; gas, groceries, medical and dental, entertainment, and so on and so forth. I also keep track of when payments have been “Processed” and how much money was “Spent”.
This section of the budget tracker breaks down my spending into subcategories and gives me a good visual of how much I should expect to spend every month. You might be wondering how I account for variable costs. Well, it’s more of an educated estimation with every service. For gas, I figure I fill up about six times a month and put upwards of $50/tank. This comes out to be approximately $300/month. Using this same principle, I calculate my other variable costs such as groceries, dental, credit card, dining, and the like. By keeping track of my daily expenses, and analyzing future costs, I am able to plan ahead, prepare for the weeks to come, make adjustments on the fly, and feel more comfortable about my situation at the moment. Like, right now, I’m in a good financial position, but next month with my dental expenses kicking in, that’s a different ball game. However, because I have a budget tracker, I am able to map out a plan to feel less broke.
Another section that is included in my budget tracker is more of a birds-eye-view of all my expenses and earnings per month. It includes my predicted monthly salary, which can differ week by week because I am paid hourly. It includes my current balance, the fixed and variable expenses owed this month, expenses owed for the first and second half of the month, flex spending I have leftover for myself, cushion, and savings, and the credit card charges I need to pay off. Pay off your credit card fellas!
The third and final section I incorporated into the tracker includes the “Pay Period”; Bi-weekly in my case because I get paid every two weeks, the current “Date”, my “Current Balance”, the expenses for both the “First Half” and “Second Half” of the month. I am currently in the first half of the month which means that majority of the services I pay for are owed during this stretch — all thanks to rent, car insurance, and my fitness membership. The section also includes how much I got “Paid”, the “Remaining Dues” I have left for this stint, the “Flexible Spending” that I theoretically have, and my “Credit Card” charges.
As I have stated before, I’m not a professional when it comes to giving out financial advice or telling people about how they should live and spend their money. Their life is there’s to live. Hopefully, through my learned experiences, newly-built-out budgeting management system, and personal advice, you are able to be more conscious of your spending habits. It’s an important life skill that you will need forever. If properly calculated, you can help yourself when facing a rut unexpectedly, save up for a home, or prepare for a vacation with the boys or girls. Work hard, play hard, but most importantly, spend smart.
P.S — if there is anyone who wants to design and build a finance budget tracker activity app with me, shoot me a message! My contact information can be found on my website.
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