Hi Money Minder,
I’ve been saving $500 a month, but I think I should be saving $1400. All my money seems to go towards bills and having fun (rent $1800, groceries $800, student loans $300, etc), and I splurge $800 on entertainment every month. Is this a big problem?
Update: I just had a lightbulb moment! Turns out, I’ve been looking at budgeting all wrong. I even went to the bank for advice, but they didn’t mention this important tip. I used to think that my wants and savings should take a backseat to my fixed expenses, but now I realize that keeping those fixed expenses low actually gives you more wiggle room for both wants and savings. So now, my needs are $4148, wants are $340, and savings are $700. Next year, I’ll be moving to a cheaper apartment thanks for all the help everyone.
Best,
Savvy Saver
Response from THE MONEY MINDER:
Hello There,
Congratulations on recognizing that you needed to adjust your budgeting approach! It’s great that you’ve taken the initiative to reassess your financial situation and make changes for the better. Moving to a less expensive apartment next year is a practical step that can definitely help in reducing your fixed expenses and freeing up more funds for savings and wants.
You’ve broken down your needs, wants, and savings categories, which is a smart way to prioritize your expenses. By allocating $700 a month towards savings, you’re on the right track to building a stronger financial future. It’s important to find a balance that works for you and allows you to comfortably cover your needs while still making progress towards your financial goals.
Adjusting your budget can be a process of trial and error, so don’t be too hard on yourself if it takes some time to find the right balance. Keep track of your expenses, continue to review and make adjustments as needed, and stay focused on your long-term financial well-being. All the best from THE MONEY MINDER as you continue on your journey towards financial stability and success.
