How To Make a Month-To-Month Budget Work

I’m on a shoestring budget and, like most of us, have been since college. By nature and nurture I love to live simply, and eagerly delve into Pinterest’s DIY projects for creative living. With my current pursuit of acting, I have five different jobs that I piecemeal to make a living each month. As such, I have no salary or pay that I can count on, which makes budgeting extremely difficult. For example, one month I made $2,968, and another month I made $1,062. That’s roughly a two thousand dollar difference in what I can spend or save in a single month!

Living month-to-month adds a lot of stress, but it also encourages me to practice money habits independent of the dollar amount I own. For example, I use a plethora of strategies for denying impulse buys whether or not I have the funds to justify the purchase.  I have also developed the mantra (common in the entertainment business) to take work when it’s offered “because you never know when the next job is coming,” and thus I continually contribute to society in a variety of ways.

I’m a visual learner, so I keep a copious record each month as a tool to see my spending trends and which jobs give the most income. Though I can’t use the Excel spreadsheet to estimate numbers for budgeting purposes, I know, for example, that for the past year my four largest expenses besides rent have been student loans, car insurance, gas, and food (in that order).  I also make sure to treat myself each month, but sometimes it’s a $4 cheese, a $10 canvas, or other months it’s a $35 trip to the Goodwill. Flexibility and looking ahead are key for my chosen lifestyle, and while I wouldn’t recommend it to everyone and certainly hope to avoid long-term scrimping, it’s allowing me to live my dream at this stage in life.

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I’m expounding on this personal information because I do think budgeting is important, and I want to share a few key points I use to stay sane. Financial advisers recommend the 20/30/50 Rule for setting budgets. Twenty percent goes towards financial priorities, thirty percent heads to lifestyle spending, and a whopping fifty percent is allocated for essential expenses.

I need these broken down.

Financial Priorities (20%): Basically…your Savings Account. A natural or health emergency fund, auto emergency fund, retirement fund, and saving-for-a-house/car fund would all be included here, whether separate accounts or a single one.

Lifestyle Spending (30%): This is your cable, internet, entertainment, hobbies, personal care (such as makeup), shopping, charities or church tithing… Anything that you could live without in the apocalypse.

Essential Expenses (50%): Housing, transportation, utilities, and groceries (including necessary hygiene like soaps and feminine products). If you have children, factor in basic expenses like diapers, etc.

For now, my “budgeting” is done retrospectively, but I still use this model to double check where my money travels every month!

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