Effective Budgeting

Introduction

Oscar Wilde famously said, “Sometimes the poor are praised for being thrifty. But to recommend thrift to the poor is both grotesque and insulting. It is like advising a man who is starving to eat less.” Indeed, most low income people are certainly familiar with having ‘thrift’ recommended to them, and all are likely sick of it. Nevertheless, there are ways to save that are less conventional, if one is willing to get a bit creative. Budgeting is only the first step in managing your finances; at the very least, it promotes a sense of control over one’s own money and spending habits. 

Creating a Budget

When creating a budget, almost all financial advisors recommend the 50/30/20 rule: 50% of income goes to essentials: groceries, gas, rent, bills, and so on; 30% goes to wants; 20% goes to savings and debt repayment. It is not always easy to separate wants from needs, but in the end, it varies from person to person– if you have to stick to a special diet for health reasons, for instance, the food that might be a need for you might be a luxury meal for others. Perhaps your needs constitute over 50% of your budget; in such a case, you may have to dip into your “wants” funds a bit, or even your savings. It is not the end of the world, but every budget, no matter how austere, needs to include at least a little extra money for spending as you wish. It is much less likely that you will stick to your budget if you don’t, and sticking to it is the absolute most vital factor in ensuring a budget’s success! 

Saving Money in an Expensive World

Many people– younger people, in particularly– have heard some variation of this phrase many times: “Well, maybe if you didn’t spend so much money on that expensive coffee!” Again, grotesque and insulting. There is a limit to how much cost one can cut, but if one is willing to do a bit of extra legwork, then perhaps extra earnings can make up for some of it. For instance, selling old clothes or possessions, monetizing art or other skills, or even finding the occasional odd job are all ways to garner a little extra income, and the internet makes all of these things incredibly easy. Of course, such options are not viable for everyone. However, everyone can take small steps, like buying generic brand foods, sharing a phone plan, or finding free entertainment. If you find yourself having difficulty sticking to your budget, try a reward system: if you don’t overspend during the month, buy yourself something you’ve really been wanting on payday, or, if you successfully put away 20% into savings for a year, dip into it and buy yourself a gift you’ve been wanting. Budgeting doesn’t always come easy, and having a reward waiting at some point can help a little. Or, if that doesn’t work, get yourself an accountability partner; there are apps out there that can fill a similar function, too!

If you find yourself having reached (what feels like) the point of no return, consider filing for bankruptcy— filing can help you reclaim repossessed vehicles, stop wage garnering, or even prevent foreclosure.

Saving With Children

Plenty of websites exist out there preaching tips for saving money while raising children, but nothing changes the fact: raising kids is expensive, and the world is becoming increasingly unfriendly to large families– cost-wise, at least. Rather than giving the same old tired advice to simply cut back, one woman gives this advice: spend on what’s important, and ignore the rest. What is important to some may not be important to others: for instance, if that coffee is the best part of your morning, don’t cut it out! You’ll only make yourself sad. But, for someone else, maybe they care more about buying themself a bi-monthly massage, or perhaps they spend that money on nice food for their cat; everyone has different priorities. Don’t beat yourself up for not cutting out yours.

Obviously, things like groceries and gas are expenses that simply can’t be helped, and it’s advice that sounds patronizing at best to those wondering how they’ll pay the mortgage every month. This transitions into the second point: learn to accept help and, yes, even charity from others. Not everyone has savings to fall back on, particularly those who had children young. For instance, you may not have a good relationship with your mother, but if she volunteers to watch the kids once a week so you can run errands or work, accept it! If your neighbor you have only spoken to once offers you some old baby clothes, don’t feel like you are taking advantage of them by accepting. Small favors can go a long way when you feel incredibly overwhelmed, especially if you are a single parent or someone without a reliable partner. If you have no support system and kids, working to build yourself a community is a good place to start. 

Saving with Chronic Illness

Budgeting becomes ever more difficult when living with a permanent injury or chronic illness. Above all, remember this: you are not alone. Many people living with chronic illness go through life unaware of the assistance they may be entitled to. If you are not receiving assistance or grants, you may want to check whether or not you are eligible, especially if your ability to work is affected. There are ways to manage some of the anxiety that comes with the cost of illness: creating a budget that forecasts expenses related to your medical care, as well as learning the ins and outs of your insurance plan, can help. Your insurance provider is not always on your side, so it is important to know your rights as a patient. Additionally, quite a few programs exist out there to help mitigate the (sometimes obscene) costs of medication. Your biggest boon, however, will always be your community; utilize them where you can. 

Conclusion

It can become easy to despair when thinking about the rising costs of living, which makes it ever more difficult to feel grateful for the small things in life. Sometimes, one simply has to trust that things will work out. If it becomes clear that is not the case, then a major change may be needed: finding a different (or even additional) job, or moving in with roommates. Changes like this are never ideal for people who do not want to make them, but it is important to remember that they are temporary solutions, and in no way permanent. Do not be afraid to ask for help, and above all, remember this: nothing lasts forever. 

Sources:

https://www.nerdwallet.com/article/finance/how-to-budget

https://sleepingshouldbeeasy.com/raising-children-on-a-tight-budget/

https://www.healthcentral.com/chronic-health/chronic-care-money-saving-tips