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I have always zero based budgeted. Zero based budgeting completely changed my life. It made me go from thinking my debt was impossible, to something I could actually get rid of. That may sound crazy, but that is how life changing a budget can be.
It’s incredible what happens when you start giving every single dollar a name. You will be shocked by how much further your money goes when doing this. When I first started this journey in 2015, I didn’t have enough income for my expenses. I was completely drowning.
That was when my zero based budget really helped me. It made me have control over where my money was going. It also made me realize that I would never make any traction on my goals unless I increased my income.
Now that I have increased my income through my many different income streams, budgeting is so much fun for me. At the end of the month, I get to zero out my budget and decide where all that extra money is going. I’m totally joking, there is no decision to be made, it’s pretty much always going to debt (for now!).
Up until now, I have had a very consistent income. I am paid 10 months of the year by my teacher salary. Then, I have my side jobs and I have my summer sinking fund for when I don’t get my salary. This has always made budgeting extremely easy for me.
Also, let’s be real. My bills are pretty minimal since I am living at my parent’s house to pay off my student loans. This has allowed me to play the very risky game of budgeting money before I have it. I don’t recommend anyone to do this. Honestly, it was stupid of me to ever even do this.
But, here we are. I have been budgeting this way for the last 4 years or so while living at home. It has worked for me up until this point. But, I need to make a change.
I am moving in with my boyfriend next month and will now be increasing my bills and expenses each month. This means that I will be back to a very strict zero based budget. I plan to get myself a month ahead this summer. Here’s how I plan to do it.
1. Utilize my summer sinking fund.
I always use my summer sinking fund in July and August. Even if I don’t need it, I empty this sinking fund by the end of August. And by emptying it out, I mean I throw whatever is leftover to debt.
Even though I do this every year, my new school pays me 12 months. So, I won’t even need a summer sinking fund next summer. Yes, I get paid less during the year because of this. But, now I’ll get a paycheck when I’m not even going to school every day.
What I plan to do is use this fund to help me get a month ahead. I will budget out this money for July and August. For July and August, this will be $1,500 of my income.
You might be wondering why I decided to create my summer sinking fund of $3,000. I chose this number because it is just above my minimum student loan payment. I can cover my monthly expenses with my side jobs. Or, I can always make my monthly expenses less, if needed. I’m always concerned I won’t be able to pay my student loan minimum payment.
2. I will use my “leftover” money in June.
In June, I will need to pay half of my rent, $400. Since I will still be living at home for most of the month, my expenses will still be lower and I will still have my salary. Currently, I usually have a lot of money leftover at the end of the month. This money always goes to replenishing sinking funds and then an extra debt payment.
For June, I plan to already have my July budget made. This will allow me to know how much money I need to set aside to pay for July.
I do still hope to make an extra debt payment in June, but the reality is that it might not happen. I’m okay with this because I am setting myself up for future success.
3. My VIPKID income will add to my summer income.
At the end of April, I started working with VIPKID. I didn’t get a paycheck for April because I didn’t work enough to get a paycheck. However, May isn’t even done yet and I already know I’ll have a $151 paycheck coming in June. This will get larger since I still have the rest of the month to work.
This paycheck will immediately be one of my income lines in my July budget. I plan to work VIPKID every morning and some nights this summer. This will be my main source of income over the summer.
4. Cutting my expenses.
In order to get a month ahead, I plan to cut my expenses a lot. Since I will be working from home this summer, my gas expense will be very low. Luckily, where I am moving, everything is very close and won’t require a lot of driving.
Recently, I have been trying to cut my grocery expense down a lot. This is done by not eating meat, or stretching the meat I do buy with other cheaper food items. For example, whenever I make taco meat, I throw 2 cans of kidney beans in. This allows us to make many more meals out of the same base.
Another way I cut my grocery bill down is by being very conscious about my portion sizes. Especially if I am eating meat.
Get yourself on a strict budget to get a month or paycheck ahead.
I am very fortunate that I have leftover money currently to help me get ahead. If you don’t have this, I recommend just getting a paycheck ahead. Honestly, this will probably be what I will have to do once I start working at my new school.
My plan is to try to stay a month ahead, but realistically, it might not happen. I currently budget monthly, but I am okay with changing it to paycheck, if that works better for me in this new season of life. That’s what is so great about budget. You can do whatever works for you. Are you a month ahead? How did you get there?