Figuring out a budget, paying off debt, ending the cycle of paycheck to paycheck living are some things that too many of us have difficulty with. There is little question that consumerism is consuming the discretionary funds of Black Americans. Unfortunately, we have not learned well the value of properly managing a budget well. Following a monthly or weekly budget is no doubt the simplest way for Black Pensacola to enhance our wellbeing, eliminate debt, and invest in the future.
This is something that should have already started, but knowing the way to manage money properly and building your life around modesty, will drastically pay off down the road. A lot of people have been exposed to Dave Ramsey, a budgeting guru famous for his Financial Peace University training classes and seminars, says, “Live like no one else, so later you can live like no one else.” By investing in your future instead of your now, you’ll be preparing to enjoy your life, have time to invest in the next generation and pass down an inheritance for your children’s children. In fact, this principle is the very mission of Bantucola.com; Be a platform dedicated to delivering on the future of a prosperous Black Pensacola by the year 2100.
What is a Budget?
A budget is simply a spending plan based on income and expenses. Planning your budget is the best way to avoid being overloaded with debt that will forever squeeze your pockets and cause a compromise in your life. Your budget will make it possible for you to acknowledge your ability to survive every single month. And not just survive, you’ll potentially have a bit of extra cash each and every month when you see what each of your dollars is being spent on!
Software for Success
While I think it’s important for you to write out your budget by hand, letting the software tools do the heavy lifting is important for you to see patterns of how you spend your money. A number of software options are available to download to your computer or operate from a web browser to give you a 360-degree picture of your money.
3 Software-As-A-Service platforms that exist to help you with all your budgeting needs are:
- Quickbooks Online
- YNAB (You Need A Budget)
- Mint
Of the 3 listed services, Mint is the only one that offers a free platform for its users.
4 Rules To Follow
YNAB offers a few simple tools to get your budget in order. We have attached an accompanying video for each of the 4 rules.
Give Every Dollar a Job
In Rule 1, every dollar you bring in gets a specific job (and we only give jobs to the dollars you currently have). Maybe some dollars get the job of paying for electricity, or maybe their lofty calling is paying for this month’s groceries. You want the unemployment rate for your dollars to be 0%, so give each one a job. You get to choose. You’re the boss. [1]
Embrace Your True Expenses
With Rule Two, no more getting walloped on the side of the head with the twice-a-year car insurance, the three-times-a-year water bill, the yearly Amazon prime fee. Rule Two teaches you how to bake these non-monthly expenses into neat-and-tidy monthly costs. You save for them equally all year, turning your monthly expenses from unexpected crunchy surprises to spoonfuls of smooth monthly consistency. [1]
Roll With the Punches
Rigid budgets break. They break on paper, they break your heart, they break your budgeting willpower. So with Rule 3, we future-proof the ol’ budget.
When you overspend on groceries (note we said when...not if)—just move money from another category that’s less important. Our community calls this WAMing the money, which stands for Whack-a-Mole(ing). Picture that arcade game: a mole pops up one place, then disappears below the surface and pops up another place. That’s your money, just reappearing in a different spot where it’s needed more. Go to town and WAM away. [1]
Age Your Money
If you’re here to break the paycheck to paycheck cycle, this rule is gonna be HUGE. Like life-changing, stress-busting, happy-dancing huge. Think of it like this: with Rule Four, you use last month’s money to pay this month’s expenses. You’re using “old” money instead of “new” money. We’ve got a handy little calculated “official age” in the YNAB app. While we don’t have a “right” number, we will say once it hits 30 days you will be living on last month’s money, and that’s something worth celebrating. Side effects of following Rule Four: forgetting it’s payday, not being afraid of the bills in the mailbox, and telling all your friends about this budgeting app magic.
When people put these four rules into practice, the average person saves $600 in the first two months and $6,000 in the first year.
Without further ado, let’s get you set up for budgeting success. [1]
References
- Ellen, Rachel. “4 Rules That Will Change the Way You Budget.” You Need A Budget, 29 Jan. 2020, www.youneedabudget.com/ynab-four-rules-budgeting/.
