How I Budget and Spend Less Than I Make Everyday

My early experiences with diving into the personal finance world taught me that budgeting would be the beginning to fix all my money problems. Putting all the numbers on one page was so intimidating that it threw me off. I realized I had to make it fit into my lifestyle and I haven't looked back since.   

As I began to learn about how to better manage my finances, budgeting was the first thing that stood out to me. This is a word I didn't grow up with, so it was new to me. I did some research to understand what it meant, and started getting overwhelmed. If budgeting was going to set me on track to a good financial path, then budgeting was what I was going to do. I tried many variations based on what I saw and made a similar model. Here is a sample it looked like.

Having the visual of all the numbers on one page was kind of an awakening. I had the thought of "I'm paying THAT MUCH for that?". I understood it as being an activity to track actual expenses versus the budget/plan. If the actuals are equal to or below the budget, everything is good and a little money dance happens. If the opposite is the case, it's time to prioritize and find ways to cut some costs. I liked the concept and tried it for a few occasions. It came across to me as a defensive tactic used to celebrate how good I'd be at guessing.

I needed more because I didn't want to wait a whole month before finding out if I was on the right path. I wanted to make daily impacts on my finances so I started playing around with some calculations. I used my income against my budget and came up with a number that led my daily spending decisions. Here is a sample of what it looked like.

The number essentially became my daily allowance that showed me how to spend less than I make everyday. If I spend less than or equal that number every day, I'd be ok. If I spend more on any given day, I'd have to be more conservative on the following days and play catch up, or lower the wants and Miscellaneous for that particular month. It wasn't perfect, but it worked for me. It was an instant value that dictated how my decision to buy that cup of coffee (or guac) would play out at the end of the month. I finally understood that spending less than I make everyday is the way to win and significantly make a dent in debts. Instead of complicating the process, it made it simple, and that's just what I needed. Sometimes, the simple path is the way to go.