How to Write a Budget That Won’t Make You Want to Die

I often get asked how the hell I afford to travel so much. If I have a job, if my family is wealthy, and so on. Long story short: I’m a workaholic, my parents are bankrupt, and I created this life all on my own. I don’t earn an amazing salary, no one’s helping me out, and I’m not an investing guru – I’m just really, really obsessed with budgeting. 

I’ve learned how to maximize the money I earn, and it’s given me the flexibility to travel the world. The good news is that budgeting is really easy to do once you commit to it! A few simple lifestyle changes can cut out a ton of unnecessary expenses.

If you find yourself hemorrhaging money every month with literally no clue where it all goes, this post’s for you. Read on to find out how I got my finances under control and started traveling the world 100% debt-free!

First Steps 

First and foremost, you need to commit. A successful budget requires discipline. If you go into it thinking of your budget as guidelines, not rules, you’re setting yourself up for failure. You will have to make some sacrifices, and you need to be prepared to stick with it.

Start off by calculating your net income – this is what you earn every month, after taxes. If your income isn’t the same every month, average your last six months of pay (from bank statements or your pay stubs) and note that as your income.

Tracking Your Expenses 

Spend a week or two writing down your expenses without changing any of your habits. Differentiate between types of expenses – write down exactly how much you spent on bills, how much you spent on transportation, how much you spent on coffee etc.

–Use an app to make tracking your expenses painless – I use Mint and it’s a game-changer. You can use an Excel spreadsheet or a journal if you prefer. 

–Make sure that you don’t actually start budgeting yet! You need to get a really good sense of your normal spending habits, so that you can tear them apart later lol.

–Write down every single transaction (credit or cash!), whether it’s your rent payment or a $2 cup of coffee. Every single dollar you spend should be accounted for.

After you’ve tracked your expenses, filter out your fixed costs (rent, utilities, and other bills). What you’re left with are your variable expenses (ex. groceries, transportation), and total non-essentials (ex. coffee, makeup). These are all the things you need to pay attention to.

Identifying Areas to Cut Down Expenses

When you look over your total expenses, the things you’re overspending on will stand out. If you’re lucky, you’ll have a ton of pointless expenses like clothing or dining out that you can rein in next month. If not, you’ll have to get creative about cutting back.

Groceries are one of the easiest and most effective areas to improve. Most people spend way too much money on food and end up wasting a lot of it – wasted food is wasted money! I regularly live on less than $100/mo, and I can get it as low as $50!

–Meal planning is your new life. Base meals around filling but cheap foods like potatoes, rice, eggs, beans, pasta, and veggies. Find ways to use ingredients in multiple dishes so that you don’t waste anything, or cook up one big batch and eat it all week.

–Plan meals around sales. If you’re shopping and notice broccoli is on sale, guess what? This week you’re eating broccoli stir fry, broccoli fritters, roasted broccoli, etc.

–Buy store-brand, not name-brand. They taste the exact same, and they’re way cheaper. The other day I bought “chocolate hazelnut spread” instead of Nutella (lol), saving me $5 (!) despite corporate America’s best marketing attempts.

–Cut back on your meat consumption. Meat is delicious, but it’s expensive. You’ll save a crap-ton of money (and help out the planet) by reducing your consumption – aim for one meal a week containing meat, if that. When you do buy meat, buy the stuff no one else wants. Chicken thighs are cheaper than breasts (and way tastier, tbh). Pork shoulder is cheap as hell and great in chili.

–I love love love Budget Bytes for cheap recipe ideas. Definitely check it out if you’re concerned that eating cheaply can’t be delicious or interesting!

Cancel subscriptions and streaming services. They add up way faster than you realise. Keep it to the essentials (Netflix etc, lol).

Cut back on alcohol. Going out is expensive, and drinks with brunch or dinner add up fast. If you still want to go out often, pregame hard so that you don’t buy as many drinks. Get beer instead of cocktails. Flirt your way into free drinks, lol.

Do you really need your gym membership? Unless you’re using the gym for serious weight training, you can most likely replicate your workouts outdoors or at home.

Daily commuting is expensive – cut down your transport costs if possible. 

–Start a carpool. Does anyone from work live near you? If so, hit them up and propose a carpool. If not, you could try using a carpooling app like Scoop if it’s available in your area.

–Use your legs. Can you bike to work instead of driving? Can you walk to the store or to a friend’s house instead of Ubering?

–Drive slower. Seriously. Driving 70 mph vs 85 mph will drastically improve your gas mileage.

Identify any other areas where you’re overspending. Do you see a lot of movies or order a ton of takeout? Are you spending $200 a month at Starbucks? Do you take way too many trips to Target? If you are budgeting aggressively, anything you don’t NEED is “overspending”. If your approach is more laid-back, you should still be conscious of just how much money you’re actually spending in each of these categories.

Actually Writing Your Budget

So you’ve calculated your income, your fixed expenses, and your variable expenses – now what? 

First of all, you need to set an ideal monthly savings goal for yourself. Your goal could be as low as $20 or as high as $500, it’s up to you.

Subtract your savings goal and your fixed expenses (rent, bills, etc) from your net income. What’s left is how much money you have to spend on your variable expenses. If this amount is totally unrealistic (ex. $100 left over for all your gas, groceries, and incidentals) you need to revise your savings goal.

Split your remaining money between realistic spending caps for each expense category. Typical categories would include transport, food, dining out, coffee, and entertainment. Set goals that are difficult, but still attainable. If you give yourself a $10 grocery budget, you’re setting yourself up for failure. Be frugal but reasonable.

Prioritize the things you can’t live without, and sacrifice the rest. If you cannot live without Sunday brunch, find that money somewhere else in your budget. Don’t deprive yourself of the things you enjoy – the goal of budgeting is just to trim the fat and get rid of all the expenses that you don’t need.

Realistically budget for fun, and give yourself some wiggle room. Don’t cut out everything fun, or every luxury. The number one way to fail at budgeting is to go too strict with it. You’ll resent it, hate your life, and end up giving up altogether.

Sticking With It 

Continue tracking your spending – your work isn’t done just because you wrote the budget! Now you have to actually live it. Continue logging everything you spend in your app, spreadsheet, or journal.

Monitor how you’re doing throughout the month and reassess your budgets or spending if necessary. If you’re 80% through your coffee budget in the first week of the month, it might be time to buy a $3 jar of instant coffee and start bringing your own cuppa to work instead. The whole point of budgeting is to stick to the budget so… stick to the budget.

Always look for ways to improve your budget and cut corners. The budget is never finished! If you find a cheaper alternative to something, always take it. If you find that your budget is too generous, lower it. Take shorter showers, remember to turn off lights, drink tap water instead of bottled.

Pay attention to every cent you spend from now on. I used to be guilty of spending cash like Monopoly money and was always baffled at how quickly it vanished. Now each dollar has a purpose. Once you start paying attention to where your money is going, you become a lot more invested in how those dollars get spent.

Keep your goal in sight, always. That instant coffee might taste like literal shit, but it still serves its purpose (caffeinating you), and just think how much better that cappuccino in Italy is going to taste! If you keep your eyes on the prize, it becomes a lot harder to justify pointless expenses.

Just like any other skill, the more you practice budgeting the better you get. I used to spend roughly $300 a month at Starbucks (…..lol) and now people ask me for budgeting advice! It’s never too late to get your finances under control and there’s always room for improvement.

I hope some of these tips were useful in planning your budget! I get so many questions about how I afford to travel and more than anything else, my new lifestyle is thanks to careful financial planning. I’ll be writing a lot more posts in this vein, including how to write a travel budget, how to travel internationally for cheap, and how to earn money abroad – so keep an eye out! 🙂

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