Here's an unfortunate fact in a Made Woman’s life: we can't have everything we want right this minute. Sure, we have confidence, sex appeal and talent, but when it comes to the purse, most of us have limits. Part of being successful means knowing how to manage finances and set a budget. Ah, managing a budget.... Sounds completely dull and slightly daunting, but it's simple if you start now. Just think: you could splurge on Prada stilettos, or you could show restraint with a stylish, affordable pump and avoid unwelcome credit card bills. In 30 years when you have more at stake financially, you'll thank your savvy younger self for learning how to budget.
The time to start is now, so pull out your pen, paper and calculator. Next, download and fill out a personal financial statement worksheet so you can assess where you stand financially. You can find one for free here on Microsoft Office’s website or just Google “personal financial statement worksheet” to search for one you like. It’s also a good idea to fill out an expense sheet to see exactly where your money is going. Suze Orman's expense tracker is an amazing tool. Once that’s done, it’s time to determine your budget! (I'm learning right along with you, I promise!) Remember, it’s not about the size of the paycheck--it’s what you do with it. All dollar amounts below are just guidelines that can be tweaked to fit your own financial situation. Utilize the following five priorities to get started:
Priority #1: Pay yourself first. When I was a bright-eyed eight-year-old, my dad gave me the Savings Lecture (which he still repeats today). He told me to save two dollars out of every allowance. Really, two whole dollars out of a ten dollar allowance? I thought he was so strict, but I saved the money anyway. Lo and behold, it all paid off when I could pay for a fancy princess Halloween costume that year on my own. That lesson stuck with me. Now I save regularly and the 401(k) I have through my job has, to my great delight, grown pretty rapidly.
Yours can, too. The key here is that you've got to pay yourself first to build financial security. If you're tight on money, save $10 per paycheck. Have a little more cash flow? Save anywhere from 3% to 5% of each paycheck. This savings will build slowly but surely and can provide you with a down payment on a house, an emergency stash or the start of your retirement fund (no, you're not too young). It's worth giving up a few extra lattes to have money in the bank.
Priority #2: Living Expenses/Bills. Set aside whatever you need to pay your bills, rent and utilities in full and on time. No further explanation needed.
Priority #3: Fund Proper Nutrition. Healthy eating habits are essential, so set aside the same amount of money each month for food and groceries and stick to it. Remember, home-cooked meals and packed lunches save bundles, so set aside about $150-$200 a month for groceries and don't exceed it. Set a $50 limit per month on going out to eat (going out to dinner is a huge money-sucker). Once it's gone, it's gone.
Priority 4: A Girls Gotta Have Some Fun. 2007 was my first year in the professional world. I worked, I paid bills, I went to the gym...that was it, really. And it was B-O-R-I-N-G. I felt like I never indulged myself with a sparkly new top, a trendy accessory for my apartment or dinner out with my best friends. That, ladies, is no way to live. Lesson learned? Factor play money into your budget. After all, you work hard for it. This covers drinks with friends, movies, travel, dinner with your sorority sisters or pizza night with your fiancé. Try $150 per month or less...you’ll be surprised how far that can take you.
Priority 5: Made Women Need a Clothing & Beauty Allowance. No Made Woman can go around wearing a torn bra, an unkempt hairstyle or a button-less pair of pants. Purchase what you need to feel comfortable, sexy and powerful. Don't kid yourself, though: You don't need Victoria’s Secret every month. Up to $100 per month is a good figure when you’re not doing any big seasonal shopping.
Still have money left-over? Take a deep breath--that's the feeling of accomplishment when you budget accurately. If you make a conscious effort to pull those purse strings and set limits each month, you won't end up biting your nails until pay day. Managing your own money and saving for the future...now that’s MADE.