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Totally Worth It, Week 2: Maintaining a budget

An illustration that includes a volcano, a tidal wave and a meteor, with a hand putting a coin in a piggy bank.
(Jackson Gibbs / For The Times)

You are one week into your new responsible, budget-conscious lifestyle. How’s it going?

Maybe you’ve checked in and tracked your expenses every day this week. Or maybe you made a budget on Day 1 and then closed all the tabs and kept meaning to circle back but didn’t. That’s OK! It’s only been one week. Let’s get back on the budget bandwagon.

One week into my budgeting experience, I remember feeling panicked. I kept opening my budget and glaring at it. How was knowing how little money I had left over supposed to help me? Assigning it didn’t make more of it. I felt extremely self-conscious about every penny I spent, knowing I would have to be accountable to myself and my budget for it.

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You are making a major lifestyle change. Feeling a little stressed or confused or overwhelmed can be a completely normal part of that. I pushed through it and so can you.

Last week we made a budget. (If you missed it, see it at latimes.com here, or search “Totally Worth It” in your inbox. And if you saw it but didn’t finish setting up your budget, now’s the time to do that! Having that budget in place is the foundation for the next few weeks.)

Today, let’s talk about maintaining a budget.

With this eight-week newsletter course from the Los Angeles Times, assistant editor Jessica Roy will help you get a handle on your money stuff.

Making a budget versus maintaining a budget

I wish making the budget was the beginning and end of the process. Hurray, I’ve got all my aspirational spending numbers written down, I can cross “budget” permanently off my to-do list! But it’s a journey, not a one-day destination.

On a day-to-day basis, budgeting is about tracking your expenses, comparing what you’ve spent with what you said you were going to spend, and moving money around as needed to make sure there’s enough to cover everything.

You have one week of expenses under your belt. What’d you buy? What bills were due this week? Did the rent check go through? Go into your budget and make sure all those amounts are subtracted from their relevant categories.

If you got paid again, assign the money from that paycheck. I start by budgeting for the necessities — the things that paycheck has to pay for between now and when I get paid again. For a big monthly expense, such as rent, I broke it up across the two paychecks I got every month, so that I wasn’t paying the entire amount from one influx. So if your rent is $2500 a month, budget $1250 in the “rent” category twice.

Then go through whatever bills and debt payments are coming up in the next two weeks that you don’t already have covered. If you bought groceries, you might want to top up that category. Same for gas for the car and dining out.

I run my life off my Google calendar. So whenever I’m assigning amounts in my budget, I check it to see if I’ve got anything that pay period that could use a little extra monetary attention. Is it Mom’s birthday? Make sure you set aside a little extra for a gift. (Get her something nice. She’s your mother.) If a friend is coming to town for Martin Luther King Jr. weekend, have extra for going out to dinner together.

A lot of people are broadly budgeting-averse because they think it has to be rigid. If anything, it’s the opposite. You are always going to have unexpected expenses come up. Again, you are your money’s boss. When one of your departments gets overwhelmed, you assign resources from somewhere else to help cover it.

So if you absolutely blew your fun-money budget at a Sephora after-holiday sale, or your modest car repair budget got overwhelmed when you drove over a nail, that’s OK! You just need to figure out which dollars are going to move around and help. You might have to be more frugal about your groceries for the next couple weeks, or skip your usual Friday night Postmates splurge, or take some of the dollars you had set aside for the trip to Mexico you have planned for March.

You’re not screwing up budgeting if you overspend. Overspending is part of budgeting. Succeeding at budgeting is adapting to that and telling yourself to keep going. Here, I’ll do it for you: Keep going!

How to budget with a partner, roommate or family

If you’re married, living with someone, or in a multigenerational household, can you budget for more than one person? Yes. With one big caveat: They need to be on board.

The main change is that you need to figure out your priorities together. Maybe you don’t care at all about having more than one or two basic streaming services, but your partner really values what’s on some of the more niche ones. Your mom could happily cook the same thing for every meal for the rest of her life, but you like experimenting and want to prioritize the monthly CSA box in your grocery category. These can be really tough conversations to have, especially since so many marriages and families have hang-ups around money. As with any hard part of the budgeting journey, I will remind you that it’ll be worth it in the end.

If they have zero interest in budgeting, well, that is going to make this more challenging, but it’s doable. I would say to focus on what your paycheck needs to do, including your portion of shared bills, and budget for those things. Ideally, you’ll lead by example, and in a few weeks your roommate will take you up on your offer to explain how that budgeting software works.

Another frequently asked budgeting question: What’s a fair way to split expenses with another person? Like so many things in budgeting, there’s no one right answer. Some couples split all expenses 50/50 and the rest of what they make is “fun money.” Some choose to split things by income: If your spouse makes twice as much as you, they take on 67% of expenses and you do the other 33%.

Here’s how I did it: My husband and I make about the same amount of money. When we first got married, we had a joint account for shared bills and expenses, which we split 50/50, and paid for everything that was “just ours,” including debt such as car payments, from our own personal accounts. In 2013, I got laid off, and we switched to a combined account for almost all expenses except for a preset amount of “fun money” that gets deposited into our private accounts.

Today, we still use that model. The joint account is for shared bills and expenses, shared experiences (vacations, dining out, museum tickets), and pre-agreed-upon items such as “we both need new ‘nice’ shoes before the holidays this year, so let’s agree to budget X each for those.” Fun money is video games, most clothes, doing stuff separately with friends, and the majority of online purchases. I don’t even track our fun money spending on the main budget — his money goes into his account, and what my husband subsequently impulse-buys from a targeted Instagram ad is none of my business.

The most important thing is not how much you both choose to budget for things. It’s the willingness to speak openly and honestly about it. The person you marry is the most important financial choice you will ever make. That doesn’t mean “don’t marry a broke person” — my husband and I were both super-broke when we got married! — it means “don’t marry someone who is totally unwilling to talk about money stuff.” Budgeting was my idea, but my husband was on board. If something came up that we wanted but couldn’t afford — like, “Hey, is there money in the budget to get pizza delivered tonight?” “Nope.” — it wasn’t me “being mean” and saying no to him. The budget is something we worked on and agreed on. Achieving our long-term financial goals were our shared priorities, not just mine.

What if my expenditures add up to more than my income?

Personal finance is not magic. If you have more going out than coming in, your options are to make more money or spend less of it.

To start, see which expenses you can cut right now: subscriptions you don’t really use, something you can maybe put off buying for a couple of weeks until you get paid again. Small changes might be able to add up to enough to break even. As you pay down debt, your monthly minimums will go down, freeing up a few more dollars here and there to assign. And when you pay a debt off, that monthly payment goes away entirely. We’ll talk more in a future newsletter about ways to spend less money and make dents in your debt.

If you’re still not finding a way to make the numbers work, look at more big-picture options: reevaluating whether you can afford the rent where you’re living now, or trading in your car for something cheaper, or getting a roommate, or finding a side gig or second job (Kathy Kristof’s SideHusl articles are a great place to start looking for ways to make a little extra on the side.)

If you can’t make the numbers add up without having to make some hard decisions or put necessary expenditures on credit cards or pay a bill late, don’t give up. High housing costs and onerous debt affect quality of life for a lot of people in America. That doesn’t mean you failed at budgeting or that budgeting can’t do anything for you. I designed this newsletter course for you to take control of your finances over eight weeks. No one’s going to have it all figured out right away.

Next week, we’ll talk about taking stock of your expenses and figuring out ways to reduce your bills and spending. Until then, commit to maintaining your money as it comes in and goes out. You’ve got this.

— Jessica

P.S.

This newsletter is free. But making it is not. Totally Worth It won’t have any sales pitches for specific financial products — i.e., I’ll never tell you that you need to buy this specific software or open an account with this specific bank. My only sales pitch is this one: If you aren’t already, please consider subscribing to the Los Angeles Times. For a budget-friendly $1, you can try it out for a limited time.

If you have questions, please email worthit@latimes.com. And to ensure you get this newsletter, please add this email address to your contacts or address book. Thanks.


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