Helping You Live a Financially,
Physically, & Professionally Fit Life

How to Make a Budget

July 11, 2016
AUTHOR: Emilie
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Reading Time: 4 minutes

Sometimes, it’s still a little crazy to me that I’ve been out of college for a year. Casey and I were just talking about it the other night- he’s been in the Army for a year and it’s been a year since my VFA Fellowship officially began. I’m quickly approaching my one-year anniversary at my current job, which I love dearly. In the last year a lot has changed. I’ve moved twice and I’ve started to gain control of my finances. I am much happier now that I don’t feel like I’m living hand-to-mouth and I never have to worry about when my bills are going to come. Not having financial role models (the result of financially reckless parents) definitely made it harder to decipher what was right and wrong, responsible and irresponsible when it came to money.

Here’s a dirty secret: When I graduated college, despite my Ivy League college degree, I was only making $38,000. Let me help you with the math around that- that means my take-home pay was around $29K per year over 12 months. After my health insurance withdrawals, my take-home pay per month dwindled to about $2200. In Baltimore, I spent $940/month in rent and parking. Additionally, I had nearly $600/month in minimum debt repayments. My $2200/month salary quickly dwindled to $660 before I even lived. I still had to pay water, electric, and buy groceries. Because I had never had a budget and I had never seen anyone use a budget, I just figured that if my bank account were positive, I was fine to keep spending, but when I got hit with my cell phone bill in the middle of the month between paychecks, I had no idea what to do.

Now, many months (and a raise) later, I recognize how lucky I am. I didn’t bury myself in too deep of a whole before I got a wake up call that I needed to figure stuff out.

I recently sat down with my sister to help her make her very-own post-college budget. What I realized is that it’s very hard to budget when you’ve never seen someone budget. This is my system for budgeting. There are variations and different people will tell you what’s “best”, but my suggestion is to iterate until you’ve found what works for you. For example, I get paid monthly and my bills comes in monthly, so I budget monthly.

Making a Budget is Hard. Emilie's guidance on making a budget is extremely helpful!
Let’s use my budget to roughly explain how much I have to spend.

Figure out your income

Figure out how much money you make. As a rule of thumb, you can budget for 60% of your gross salary as your take home pay. (In most cases, you’ll take home a little more, but better to be prepared for that then not.) This means, if you take $12/hour, assume that you’re taking home $7.20/hour. If you make $100K/year, assume you’re taking home $60K/year. It doesn’t really matter, just figure out how much money you should expect to take home each month. If you get paid every two week, assume you’ll get two paychecks a month (and the surprise months with three paychecks will let you put those entire paychecks towards your financial priorities!).
Take-Home Pay: $2600

Pay yourself first

If you’re like me and are paying off debt, this means figure out your minimum debt repayments. If you’re not, figure out what your company’s 401K match is. Figure out what your financial obligations are.
My minimum debt repayments are $93 (ECSI) + $188 (Upstart) + $100 (Southwest) + $35 (Discover) = $416

List your bills

Rent, Cell phone, Renter’s Insurance, Car Insurance, etc. Whatever your bills are list them here. You should also include non-monthly bills, such as yearly subscriptions or quarterly taxes.
My bills:


  • Rent/Joint Expenses: 945
  • T-Mobile: 116
  • Giving: 100
  • Renter’s Insurance: 13
  • Fitness: 20
  • Tailwind: 15 (set aside, yearly expense)
  • Buffer: 9 (set aside, yearly expense)
  • Stratechery: 8 (set aside, yearly expense)
  • Future Travel: 85 (set aside, irregular expense)
  • Home Fund: 200 (set aside, irregular expense)

Remaining: $1089

Calculate your Flex Spending Number

This is where you calculate how much pocket money/irregular spending you have. This might be groceries or irregular medical expenses. This is for drinks out with friends and a night out on the town.
I set aside $220/month as my flex spending money. Usually this is plenty.
Remaining: $869

Revisit your financial priorities

I want to be paying more than the $416 minimum on my debt. I set the goal of paying off at least $1000/month, meaning I need to increase my debt repayment by $584. You may decide you want to invest more or save more.
Addition to Debt Repayment: $584
Remaining: $285

Leave yourself from wiggle room

Your budget needs to be revisited every month, so leave yourself some wiggle room to accommodate those things that will inevitable come up. For example, this month I ordered book shelves for the home that came to $217, instead of my budgeted $200, so my leaving myself a little wiggle room in my budget I can make my budget specific to a given month.

Use the leftovers to attack your goals

Any money that I have at the end of the month, I immediately allocate towards my financial goals. This means that even when I have only $3 left, I make sure to put those $3 towards a debt repayment! Every. Single. Dollar. Counts.

So that’s the short easy way to create an easy, living budget that can be adjusted for your life every month. Do you currently have a budget?

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