SpendGuard: Daily Spending Accountability for Addiction Recovery

I need financial advice, I’m trapped in a hole and can’t get out

I need financial advice, I’m trapped in a hole and can’t get out

Everyone is going to say make a budget. You should do that, but a budget is just a plan. You can make a budget to spend $2500 on bills, and put the rest towards debt. That doesn't actually force you to not blow all your money. I think the first step is understanding where your money goes. Make a word document or something and put all these categories. First, you have the expenses that are the same every month. Rent, utilities, phone bill, car payment, car insurance, credit card payments, student loan payments, whatever things are the same every month. This also includes groceries, gas for your car, which may not be the exact same every month but you have to spend money on every month. For me, that looks like this: Rent: $1000 Utilities (included in rent) Car insurance: $140 Gas: $90 Groceries: $300 Household stuff (toilet paper fund) $50 Phone $30 Health insurance: $130 That's your necessary spending. My total is $1740. I HAVE to spend that every month just to stay alive. Then you need the categories for discretionary spending. These are things you spend money on, but you could cut out if you absolutely had to. Things like eating out, movie/concert tickets, clothes, amazon, weed and alcohol, haircuts, nails, in app purchases. Everyone is different on what they spend their money on. Many people don't even know what they spend this on. So you need to track and figure it out. I would suggest these categories: Restaurants (including doordash, etc.) Alcohol, weed, vapes, energy drinks, etc Amazon purchases. Unless it fits in your "household stuff" budget above, like toilet paper, it's a want not a need. Going out fun (ubers, drinks, tickets, things you spend to socialize) Other fun (video games, books, sneakers, whatever stuff you like to buy) Then every single day...Every Single Day...you go into that document and put down what you spend that day in those categories. So if you go to work, go out to get lunch, stop at the grocery store on the way home, and then buy something on Amazon while watching tv, you go in to your expenses tracking document and put the purchase amount for lunch under the "restaurants" column, and the amount for groceries in the "grocery' column, and the amount for amazon in the "Fun stuff" column. So over the month, you will see day by day the stuff you spend money on adding up, as you add something to the fun column every day, or to the restaurant column, or whatever you spend your money on. The hard part is going to do it EVERY day. Because it sucks to look at it and see all the stuff you spend money on. But that's the important part. It doesn't matter if you make a budget to spend $100 a month on going out, if at the end of the month you actually spend $500 on going out. So you need to make a budget, but then you also need to go and track every single thing you spend money on. I did this for three months. And after three months, I had a very good idea of what I spent my money on, and what areas I spent a lot more than I thought. A budget needs to cover all of your money. It isn't just bills. It's what you're going to spend on fun, what you're going to spend on savings, what you're going to spend on unexpected things. Every single dollar has a place to go. In addition to necessities, like bills, and discretionary spending, like fun, you also need a savings categories. This is both for a savings fund, like an emergency fund, AND for bigger one time expenses you have that may come up. So I put $100 aside every month for car repairs and expenses. My bank account lets me have different sections, so I have a "car" section, and when I need to get a new registration, or get my oil changed, or have a car repair, I use that money. I have $1200 a year to cover that stuff. It won't be $100 every month, it will probably be 0 most months, and $1000 once a year. But it's not an emergency. I know that cars come with costs, and I can anticipate what those costs are. So I don't want to get hit with a big repair. I put some aside all year. I have a travel budget. $100 a month for travel. That means I can only spend $1200 to travel a year. If I want to do a more expensive trip, I need to save up for more than a year. If you have pets, you need to have an emergency fund for vet bills, $50 or $100 a month depending on the animal. And you should have six months of living expenses saved up for emergencies, like losing a job or needing to move. Six months living expenses for me would be the $1740 I need to cover bills in a month, times six. I'd probably round it up to $2000, and save up $12,000. I'd put that in a high yield savings account. Then once you have that, you need to still save up for savings, for retirement, for whatever. You should absolutely not just be spending all your money every month. Even if it's just $50, save some money every month and put it aside. Maybe someday you'll need to buy a new car, or pay for a wedding, or want to buy a house, or whatever. Save money.