Budgeting is not a favorite topic of many 20-to-30-somethings. After all who wants to talk about such mundane topics as paying bills and saving money? Instead of looking at a budget in a negative light, as showing you what you can't spend, look at it in a positive way. Following a budget helps you put funds away to acquire big ticket items like a sports car, classy furniture or even a luxury vacation, without going into debt.
A daily budget includes those incidentals that you pay for every day. For example, if you stop for a gourmet coffee on your work break, buy lunch at a restaurant, pick up the newspaper and pay for public transportation every day, those would be daily expenses. Not including them in your monthly budget would lead to overspending every month. Not a good thing.
If you take what you spend every day for the next 30 days, it won't add up to the total amount of money required to pay all bills for the month. Your monthly budget includes the recurring expenses you pay just once a month, such as mortgage or rent payments, utilities and insurance. You also need to budget for unusual expenses that occur, such as repair for your car. These are difficult to forecast but omitting them can cause you to be over budget in the long run.
On the Other Hand
If you don't include what you spend on a daily basis and include it in your monthly budget, you'll always be over your monthly budget. Daily expenses add up quickly. If you spend $15 per workday, that’s $330 per month -- assuming 22 workdays -- enough for a car payment. Well, a payment on a subcompact car anyway.
You could budget an arbitrary amount for daily spending but that may, or may not, cover what you actually spend. Track your daily expenses by noting them on a calendar for the next 30 days. Or send yourself an email through your cell phone every time you buy something, noting what it is and how much it costs. At the end of 30 days, you'll have a much clearer idea of what you spend. Then if you want to cut down to a certain sum to save money, you'll be able to prioritize the expenses and cut out the least important items.
Stay on Track
Withdraw the money you need for your daily budget once a week instead of hitting up the ATM whenever you need cash. Keep the money in an envelope at home. Every morning transfer what you need into your wallet. Look into ways to decrease your spending. If you take public transportation, see if they offer a monthly pass for a discount. Check out the "buy 10 and get one free" program for your coffee drinks. Look for coupons in the paper for a break on your fast food lunches. Squirrel away the extra funds for a nice dinner, a special movie night or sock them away in your savings.
- "The Money Book for the Young, Fabulous & Broke"; Suze Orman; 2007
- MSN Money: What's Your Daily Disposable Income
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