Read

3 Things to Know If You Think You Don't Need a Budget

Published:
December 19, 2023
August 8, 2019
How-To-Stop-Spending-Money|How-To-Stop-Spending-Money-Square

Not that long ago, my bank account hit zero — or damn near close to it — almost every other week. While this might sound alarming, it never bothered me. In fact, I was pretty much always planning on it to happen. I knew that I was going to be paid a certain amount of money twice a month, and as long as it got me to my next paycheck, then I was all good. 

Fortunately, I’ve learned that living paycheck-to-paycheck is not a recipe for long-term success and financial security.

I wasn’t the only one approaching life this way. According to a 2017 study, 78 percent of US workers live paycheck-to-paycheck. Most Americans can’t cover an unexpected $1,000 expense

Today, my finances are much more stable. My wife and I have set aside a portion of the money we’ve made over the past few years so we can handle a large unexpected expense or pay our bills if one of us is unable to work for an extended period of time.

But in order to accomplish this, I’ve had to adjust my mindset a lot when it comes to personal finance — I had to learn how to look five, 10, and even 40 years down the road, instead of just two weeks. 

Here are three things I needed to learn in order to save for a rainy day and work toward financial stability.

Just because you can afford it, doesn’t mean you should buy it

This lesson is was one of the most important — and one of the hardest — insights for me to learn. At times, I would hit the end of the bi-monthly pay period with a few hundred dollars to spare.

Unfortunately, my reaction to this little bit of surplus was to conclude that I could afford to have a big weekend out with my friends or buy concert tickets. But if you have unused money, that’s the perfect time to set money aside and get ahead. You never know when you’re going to need it in the future. 

That’s why it’s better to plan to save money for things you really want, like concert tickets or a nice dinner, and not just buy them on a whim. 

You should have a plan for every dollar you make, even if that plan is to put it in savings.

Find a number to set aside every paycheck and stick to it

The best way to save money for the future and get ahead is to pick a number to save every paycheck and stick to it. If, after taxes are taken out, you make $1,000 every two weeks and you decide to set save $100 every paycheck for a rainy day, then make sure you don’t ever skip this step, if possible. Once you start breaking your financial rules, it can be hard to stop. 

Mobile apps can offer a huge assist as you try to stick to your savings goals. For instance, as a freelancer, I have to save money on my own to pay quarterly taxes. In order to make sure I am setting aside enough money, I have Qapital on my phone, which automatically sets aside 30 percent of every payment above $100 that is deposited into my account. (You may also set it up so that a certain dollar amount is set aside per paycheck deposited.)

The money goes into a Qapital account, which can easily be linked to your bank account so money can be sent back and forth quickly and easily. This way, you know money is being set aside before you get a chance to spend it.

Plan for semi-frequent bills

When calculating bills, it’s easy to forget about those bills that don’t recur every month, such as oil changes, doctor visits, home and auto insurance — not to mention seasonal expenses like buying Christmas presents and wedding gifts. 

While $50 or so for an oil change isn’t necessarily a large or unexpected expense, it is something you can plan and set money aside for. You don’t want half of the money you worked hard to save the previous week to immediately be put towards an oil change that you know you need every three months or so. 

Another semi-frequent expense might include having to buy presents for a relative or friend’s birthday or paying to play in a recreational sports league. That’s why it’s important to have a “special occasions budget” or a “rec sports budget” so you’re always prepared and budgeting appropriately. A monthly budgeting spreadsheet can be immensely helpful when it comes to planning for these infrequent expenses.

Keeping your bank account above $0 can be challenging, but can be very beneficial to your future and your overall stress level. These common-sense tips will have you well on your way to spending money only when you can afford to — because you didn’t spend it simply when you could.

Creators:
Andrew Mentock
Published:
December 19, 2023
August 8, 2019
On a related note...
Artist Brings Beauty to Skid Row

Artist Brings Beauty to Skid Row

Grotto

Are You Building Your Life Around the Wrong Expectations?

Are You Building Your Life Around the Wrong Expectations?

Julia Hogan-Werner

Hate Your Job? These 4 Questions Will Help You Move Forward

Hate Your Job? These 4 Questions Will Help You Move Forward

Marye Colleen Larme

How I Paid Off Student Loans (And Found Peace During It)

How I Paid Off Student Loans (And Found Peace During It)

Allison Barrick

Employing Adults with Autism: The Right Decision

Employing Adults with Autism: The Right Decision

Grotto

What No One Told Me About Starting my PhD

What No One Told Me About Starting my PhD

Hallie Michelle

Why You Need a Life Advisory Board (Beyond Your BFFs)

Why You Need a Life Advisory Board (Beyond Your BFFs)

Chuck Lamphier

Boxer Mike Lee: From Pain to Purpose

Boxer Mike Lee: From Pain to Purpose

Grotto

Fear of Failure: What It Is and How to Overcome It

Fear of Failure: What It Is and How to Overcome It

Andrew Mentock

3 Tips for Giving Constructive Feedback

3 Tips for Giving Constructive Feedback

Ben Wilson

What I Gained By Seeking Out a Mentor

What I Gained By Seeking Out a Mentor

Andrew Mentock

Why Getting Distracted May Be the Key to Productivity

Why Getting Distracted May Be the Key to Productivity

Lillian Fallon

5 Tips For Living on a Tight Budget Without Feeling the Pinch

5 Tips For Living on a Tight Budget Without Feeling the Pinch

Sophie Caldecott

6 Steps to Addressing Your Workplace Burnout

6 Steps to Addressing Your Workplace Burnout

Tony Oleck

What It Takes to Build a Business of Beauty

What It Takes to Build a Business of Beauty

Grotto

Meet the First ‘Working-Mom’ Saint

Meet the First ‘Working-Mom’ Saint

Emily Bouch

Fashion Shows Raise Awareness of the Effects of Violence on a Community

Fashion Shows Raise Awareness of the Effects of Violence on a Community

Grotto

I Got the Degree, but Not the Life That Was Promised With It

I Got the Degree, but Not the Life That Was Promised With It

Gabby Baniqued

3 Things to Know If You Think You Don't Need a Budget

3 Things to Know If You Think You Don't Need a Budget

Andrew Mentock

Moving from Denver to Indiana to Support the Family Farm

Moving from Denver to Indiana to Support the Family Farm

Grotto

newsletter

We’d love to be pals.

Sign up for our newsletter, and we’ll meet you in your inbox each week.