LIFESTYLESadie's Budgeting 101 Class (self.RedPillWomen)

submitted by [deleted]

Whether you're single or in an LTR, money is something that will always be on your mind, at least every Friday. Many people growing up in my generation and younger do not know how to budget (frequently people in my parents generation do not know how to either!) Budgeting is very easy, sticking to it is difficult. However, as Dave Ramsey, financial expert says, if you fail to plan, you plan to fail. If you want to achieve your goals with your money, it is absolutely necessary. So here it is, Sadie's Budgeting 101 Class!

No matter how you get paid, whether it is weekly, bi-weekly, bi-monthly or monthly, budgeting is at its essence, the same. If you get paid weekly, that's the money you have to work with for that week. If you get paid bi-weekly, divide the amount in half, you get half the amount by week. So if you get paid $400 bi-weekly, you have $200 each week to spend. Do NOT overspend! You must be disciplined! Put it in a savings account you don't have quick access to, give yourself cash, do something to ensure you plan properly and set yourself up for success. Next, take a look at the bills due during this pay period. Have your bills listed somewhere that is easy and accessible to you. I have mine saved in my Google Calendar. It can also be on paper, or wherever you want it, make a system that works for you. List every single bill, utility, payment, subscription you pay. Some of mine are:

  • Google Play
  • Car Insurance
  • Child Support (Mr. Dunham's, not mine!)
  • Dentist Bill
  • Dollar Shave Club (highly recommend, btw!)
  • National Grid
  • Rent

    For the pay period, either weekly or bi-weekly, subtract the bills from your paycheck. I have a rule that for large bills, (anything over $90) I spread over two or three paychecks. For instance, our car insurance is $116.00 so I divide that by 2 and save half during one bi-weekly period and the other half comes out of the next bi-weekly paycheck. That way I'm not taking a $116 hit out of one pay period. Depending on your situation, you may want to spread it out over more weeks or maybe you can bankroll it from one. Its about creating a system that works for you. Experiment a little, see what works best. Your budget plan will change after you have put the plan in place because implementation will teach you how well the initial plan works or doesn't.

    Once you have your bills and utilities theoretically paid, next move to the essentials. My essentials are:

  • Tithing at church

  • Groceries

  • Gas money

  • Mad money (this is fun money I can spend on whatever I want, Starbucks coffee, nail polish, new shoes I want but don't need, etc.)

  • Savings Goals

    Subtract all that from your total. If you still have money left over, you're in the green! If you don't you're in the red. Go back and adjust things. Maybe you need to break up a payment into smaller segments, or lower your mad money allowance. Maybe you can't afford that beer run this weekend (I'm looking at you, Mr. Dunham!) Work and re-work your budget until you're green. I like to leave $100-$150 cushion in my checking account, as a just in case. Just in case of what? I don't know. Sometimes Mr. Dunham wines and dines clients and it takes a week or so for his company to reimburse him. This cushion is how I ensure we won't be overdraft in our checking account.

    If we have more than that cushion left over, there's also a plan for that. The excess, even if its just $20, goes right into the savings account. It doesn't get spent. It isn't free or found money. It gets transferred right into savings. Let's say we got paid $800 in one pay period, but there was a balance in our checking account of $350. After all bills, utilities, essentials, and cushion, there's a surplus of $175 left. That $175 gets transferred.

    This is your most basic budget. It really is this simple! The hard part is implementing it. Its really just a matter of self-discipline. Every Friday (or whenever you get paid, the traditional day is Friday) make a plan for your money for the next week or two. Make yourself do it that day!! I've put it off a day or so before (many times) and then before I know it, we're getting paid again and our money had no plan (aka it was wasted).

    Some other helpful tips:

  • Set everything you can up on auto-pay! Its so great to not have to remember to pay things or send out checks. Our Google Play, Dollar Shave Club, child support cell phone bill, and electric bill are all on auto-pay. The institutions pull the money when they're supposed to and all I have to do is write it in the budget. Our bank automatically sends out checks for child support. The only checks I write on a weekly basis are to the church for our tithing.

  • Track your spending! You will be horrified at the money that slips from your hands when you're not watching it. When we first started budgeting, we calculated we were spending an extra $900 a month on coffee, dates, energy drinks while at work, clothes we wanted but didn't need, alcohol, etc. And to think we were befuddled because we thought we didn't make enough to save money! We were partying with it!

  • Our family doesn't believe in using credit cards or taking out large loans for cars. As a result we do not have car payments and we do not make credit card payments. Some will argue that this helps build your credit and its true, however Mr. Dunham and I, like the rest of America, fell into the trap of using credit cards for everything. If you can honestly just use your credit card to buy gas or a soda and repay it at the end of the month to build your credit, go for it. Most people can't do that and end up heavily in debt. Just be forewarned. (Also, I'm not going to debate the de/merits of credit card debt and auto loans, so don't waste your breath in the comments. I'm just telling you what I do.)

  • Whether you need a new car, to pay off student loans, live at home or whatever, you need to be saving. If you say to yourself, "I'm 19, I don't have anything I need to be saving for," save anyway Your future self at 28 will thank you (I wish someone had told me that at 19. Learn from my mistakes!)

Whether you use credit cards, have an auto loan, get paid weekly or bi-weekly, once you begin intentionally spending your money and planning your savings and spending, you will not have to stress about "Can I afford this? Can I not?" You'll know. Try it out! If you have a question or feel I missed something, please ask! I hope you enjoyed this post!


[–]Nyquil-Junkie 7 points8 points  (11 children)

Manipulate a couple of credit cards with good cashback rewards. For example, Amazon visa now pays 5% back on Amazon purchases plus some other vendors. I have a chase card that pays 3 or 5% I forget off the top of my head... on gas food and a list of stores. By using the cards wisely, you make some money back.

For example, you buy Amazon prime for the shipping and prime benefits. If you buy all the stuff that you can on amazon (at very good or often unbeatable prices) at the end of the year the rewards back pays for the Prime, plus some cash left over to use back on more purchases.

A lot of cards can be manipulated like that. You can also make a large purchase for no interest if you shuffle them right.

Its a well known fact, that a good credit score will cancel out a high N count.

[–][deleted] 6 points7 points  (2 children)

good credit score will cancel out a high N count.


I'm obsessed with Amazon prime too. I do a lot of my grocery shopping on there. Thanks for the tips about the credit cards, I'm utterly clueless about that stuff.

[–]Nyquil-Junkie 3 points4 points  (1 child)

I often say I worship the Amazon god.

I pray to the website, I offer it up a digital sacrifice. In 2 days my prayers are answered with a no fuss return policy.

Praise be to the holy website, and the consumer goods that shall descend upon is all. Amen.

[–][deleted] 2 points3 points  (0 children)


[–]Willow-girl 3 points4 points  (0 children)

Its a well known fact, that a good credit score will cancel out a high N count.

ROTFL! Well, that explains everything ...

[–]refelgallo 1 point2 points  (3 children)

I second this but only if you pay off balance monthly, otherwise what you pay in interest with minimum payment eats away at your rewards.

[–]Nyquil-Junkie 0 points1 point  (2 children)

True. Unless you plan on the rewards being the agent that nullifies the interest.

[–]refelgallo 0 points1 point  (1 child)

if you are going to pay the minimum balance, and pay interest only to nullify it with the annual rewards; You might as well just use a debit card.

[–]Nyquil-Junkie 0 points1 point  (0 children)

I didn't sayt pay the min... you never pay the minimum. You pay the balance off or in the least as much as possible if you must spread it out for more.

You should as a norm never charge more than you can pay within 30 days.

[–]tempintheeastbayEndorsed Contributor 0 points1 point  (2 children)

5% BACK ON AMAZON PURCHASES?! Dear god that's amazing

[–]Nyquil-Junkie 0 points1 point  (0 children)

My chase CC account says today in my account page, I can get 5% back on the monthly list of purchases they seem to change around every now and then. Gas, food, pharmacy, ect ect. There's an effective 5% discount on some stuff outside of Amazon. Cool!

[–]Willow-girl 7 points8 points  (4 children)

I hate to admit it, but I don't budget. I'm just a cheapskate; I never buy anything unless I really have to, then I try to find it at the thrift shop first! Otherwise, I keep enough money in the checking account so that I never have to balance it or worry about bouncing a check. I charge everything to a credit card so I get one bill at the end of the month and a cashback rewards check at the end of the year. (I pay off the CC in full every month so there's no interest.) I stuff my pocket change and spare cash into a Mason jar in the laundry room; that's money for the pizza delivery guy, LOL. My parents raised me to fear debt; I've always paid off my mortgages as quickly as possible and paid cash for my vehicles.

[–][deleted] 0 points1 point  (3 children)

I hear you about the thrift stores! I love them.

[–]Willow-girl 1 point2 points  (2 children)

We hit the Saturday-morning yard sales too in season. Most of the big housing plans around here have a neighborhood sale at some point over the summer, which is great because you can hit 10-20+ houses in a couple of hours without a lot of driving! Our house is pretty stuffed to the gills already, so mostly I look for things for the garden. And clothes ... the only clothes I buy new are bras, underwear and work boots. :-)

[–][deleted] 0 points1 point  (1 child)

Love yard sales

[–]Nyquil-Junkie 0 points1 point  (0 children)

Trash days depending on the season are awesome. Yes, we are the people in your neighborhood who root around in your trash.

[–][deleted]  (2 children)


[–][deleted] 2 points3 points  (1 child)

😔 8.5 years too late for me

[–]SouthernAthenaEndorsed Contributor 2 points3 points  (1 child)

I love Dave Ramsey! I took his class at the end of last year. My parents taught me to budget growing up, be he broke it down in such a great way and helped me look at my priorities differently.

[–][deleted] 1 point2 points  (0 children)

I love Dave Ramsey so much! He's changed my life!

[–]loneliness-incEndorsed Contributor 2 points3 points  (6 children)

Quality post!

I'd like to add.

Whether you get paid monthly, weekly or whatever, always budget monthly. Why? Because most bills are monthly. If your mortgage, property tax, car payment and insurance amount to half (or more) of your salary and they all come out of your bank account on the first of the month, you ought to save up for this from the beginning of the month and not wait until the last week of the month.

Credit cards should never be used as a source of borrowing, ever! The interest rates are ridiculously high and will lead you straight to financial ruin! The purpose of credit cards is to consolidate all the little purchases into a single payment. If you aren't disciplined enough to use it that way, don't use credit cards.

[–][deleted] 1 point2 points  (0 children)

Good points, thank you

[–]Nyquil-Junkie 0 points1 point  (4 children)

Credit cards should never be used as a source of borrowing, ever!

I disagree, when used right, one can borrow large sums of money nearly interest free. With multiple cards one can extend that for as long as is needed for repayment, however by doing that you do end up paying around 1-5% in the end.

But depending on the severity of your immediate need, that can be quite a bargain.

And credit cards are only used as a source of borrowing. That's their sole purpose. How you borrow and pay back is the trick.

I agree, if you have no self control you should avoid credit cards. You can very easily ruin your finances by playing fast and loose with them.

They have no sense of humor or forgiveness.

[–]loneliness-incEndorsed Contributor 1 point2 points  (3 children)

I hear you and I know people who've done this successfully. However, it's a form of juggling. As long as all the balls remain in the air, everything is fine and dandy. The minute you forget one bill or worse, if you become sick or if similar things happen, the results of having so many balls in the air can be disastrous to put it mildly. I've seen this happen too many times to consider this a good option. You're playing with fire if you do this.

[–]Nyquil-Junkie 0 points1 point  (2 children)

Actually that risk can be eliminated or limited with payment insurance most all CCs offer. These plans cover from 1-3 missed payments (conditions apply) illness job loss catastrophic conditions et al that cause you to be unable to pay. Most offer a 6 month deferment plan also.

Granted you pay for that, depending on your balance every month. Depending on your situation the small fee can be worth it.

Like everything else..... you have to plan ahead.

Also, "playing with fire" is exactly how you build an excellent credit rating. Once you have, the protection offers get better as do the interest rates. If you allow the credit company to get a little taste of interest every now and then it actually helps your score. To maximize your credit rating you really should never spend more than 12-14% of your credit limit to begin with. So if you have a 5k limit on a card, in reality that card is only good for a safe $600-$700 credit line. Sure, you can run it past that to the limit.... doing that is what screws you plus doing it puts a bite in your credit score. People get 5K and they actually use 5K. Bad idea. My loose rule of thumb is for every 1000 in credit available, you spend only 100 for maximum effect (and safety).

Numbers are predictable. People provide the variables that do the damage.

[–]jack_hammarred 0 points1 point  (1 child)

Can you explain how spending 12-14% of the credit or less is more effective and safe? I've only taken out Care Credit, for <$500 over the cost of my wisdom teeth extraction surgery. I'm afraid I made a huge mistake...

[–]Nyquil-Junkie 0 points1 point  (0 children)

Its one of those screwy things the credit agencies use to gauge your credit score. As I understand it, 12-14% untilization of the available credit balance is the sweet spot that says "I have credit, I use it wisely but I don't overextend myself". To the credit card company, this means you will run a ballance for them to collect interest on, but chances are you won't run such a high balance you'll never be able to pay it or you will default on it and leave them with the bag.

As long as you pay your CC on time and dont miss one or are late, it still is in your favor credit score wise. The 12-14% thing is not a vital rule to stick to if you can't do it. If you are trying to build up a credit score, the most important things to do are pay a bit more than the min payment, do not be late or miss a payment, and if possible, don't exceed 14% of your credit limit. I think the last one is more vital when your credit limits exceed multiple thousands of dollars.

For example when I was very young, my first CC had a $100 limit. I ran that up to the hilt and paid it off every month, most of the time. (I had no idea about credit in general I got lucky) In a very short time they jacked that limit up, up up... which opened the door for more CC offers with very low limits. I did the same with those cards. After about a decade I had more credit available than I had income per year by 10x.

And I think thats where that 12-14% thing comes into play. Once the credit rating machine saw that I was not going to exceed that limit, lo and behold they were chomping at the bit to jack my limits even higher. My theory is this is right where people go off the deep end and 14% of their credit limit collectively is far more than they can afford.

If you consult someone who knows the tricks of the credit trade you can find out at what point these things really make a difference. From my experience I think if your credit limit per card is less than 1K, the 12-14% limit is not very critical, if you pay on time and keep the balance low or at 0. Once you start having more available credit than you make a year, I think it starts to really make a difference to keep that collective spending limit below 12% of your total available credit.

I could possibly be in error, but as I see it and have read about it, this seems to be how they operate.

[–]dunamis_energeia 2 points3 points  (1 child)

Thank you very much, budgeting and saving posts are some of my favourite topics.
I also wish I had saved money that my high school gave me for being an honour student. It went down the trashbin for nothing.
Now I'm saving my college scholarship and have a plan of how much I want to save total until the end of my masters degree.
I don't know if there are any students in here that would be interested in some tips, if so, I'll gladly write a new post.

[–][deleted] 0 points1 point  (0 children)

I bet there's interest in a post like that!

[–]prime_zero 1 point2 points  (1 child)

Excellent post. Might I add a tool that help me go from rubbing nickles together waiting for payday to having an emergency fund plus 2 months expenses paid for. YNAB (you need a budget). I don't use the automated bank sync, but prefer to manual admin everything.The concept is nothing groundbreaking, just a fancy worksheet. The implementation and UI on the other hand is what did it for me.

[–][deleted] 2 points3 points  (0 children)

Oh definitely have an emergency fund. And if you live on commission or your pay is dependent on a certain season, have a hills and valleys savings.

[–]refelgallo 0 points1 point  (5 children)

Great post!

For Dollar Shave club I personally would recommend going with either a safety razor (the only kind where you replace a double sided blade) initial cost is minimal. $20-$50 for the razor replacement blades are ~$1 for a 10 pack. you can even find a 100pack for ~$7.

personally I prefer straight razors, HIGH initial investment $250 (and higher) for blade, strop, whetstone. But with proper care a straight razor can be passed down for generations.

[–][deleted] 0 points1 point  (4 children)

My husband likes the idea of a straight razor but he's pretty sure he'd kill himself by accident with it, lol. We bought two handles, one for him one for me and every other month we get a box of razor heads for $6.

[–]refelgallo 0 points1 point  (1 child)

Youtube search "how to straight razor shave" and check out theartofmanliness.com

[–][deleted] 0 points1 point  (0 children)

The art of manliness is where he got the idea from!

[–]tempintheeastbayEndorsed Contributor 0 points1 point  (1 child)

My ex tried using a straight razor... one bathroom sink full of blood later, we never tried again.

[–]Nyquil-Junkie 1 point2 points  (0 children)

The idea is leave the straight razor on the shelf in plain view for many Alpha points. Then close the door and use the safety razor.

[–]ivegotsomequestions0 0 points1 point  (1 child)

This is great stuff! Just to add, you should be socking away as much each year into retirement and other investment accounts as possible.

I highly recommend the Ivy Bytes/Alex Frey Beginner's Guide to Investing for a very lucid explanation of compound interest, tax breaks, and diversification. Compound interest means that the earlier you put the same amount of money in investments, the more (far more) you have when you're old. Tax breaks mean that you may save a lot by putting money into retirement rather than paying it out to Uncle Sam. Diversification means that you try to use accounts that let you put money into a mix of stocks, bonds, commodities, and real estate, domestic and international. It's also best to just let your money sit there and grow, which most of us might prefer anyway, rather than trying to beat the market.

Savings accounts definitely have their place as we all need some cash that is readily accessible, but it is a great idea for everyone to go for that 4%+ return.

[–][deleted] 0 points1 point  (0 children)

I totally skimped on the savings part of the post, your right. Thank you for pointing that out.