I think budgeting and practical finances should be taught at multiple stages throughout a student’s life. I thought I knew the general idea but didn’t appreciate how much neglecting it would set me back.
What is your process for budgeting? As a starting point this article lists a few methods.
I use zero based budgeting where every dollar is assigned a purpose. I don’t end up sticking exactly to the plan, but I do keep a spreadsheet which lists my current balances and all expected expenses, so I can see my future balance and avoid going in the red. A couple times a month I cross off expenses which have been paid and update the balance. This is especially helpful to me because a big portion of my income is irregular month to month.
I always found it easier to basically automate the process as much as possible. “spend” every recurring expenditure and also set aside the most aggressive savings/investments possible using separate bill pay and savings accounts or buckets. Everything is taken out of the main account as soon as your paycheck hits, so it means everything you see on your spending account is a free dollar that you can use for fun or food.
Some people might operate better with a set amount for groceries too, but I personally found that too restrictive.
A good budget is one that you stick to, helps you achieve your goals, and crucially, allows you to enjoy your life to at least some extent. Whatever method works for you, it’s important to give yourself permission to spend some money on fun. However small.
Yes, I definitely rely on all automatic payments. When I first moved out on my own thought I had a grip on things but too many bills ended up paid a couple days late, even though I had the money.
We also have recurring transfers to savings and to individual accounts for “fluff” spending.