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How to Make a Budget That Fits Your Lifestyle

Queer folks are more likely than cishet peers to have a lower salary (even after college), more likely to face discrimination when applying for loans and can have higher medical costs that aren’t covered by health insurance.

That makes making and sticking to a budget especially important — and challenging — for LGBTQ folks.

The obstacles facing queer people

You might think these claims are an exaggeration, but statistics back them up. For example, a study by Student Loan Hero found that 40% of LGBTQ borrowers were denied financial assistance for college because of their sexual identity. The 2019 Workplace Equality Factsheet by Out & Equal showed almost 10% of queer people had left jobs after experiencing discrimination, and a whopping 50% experience discrimination in the workplace on a regular basis.

On top of that, trans folks face extra medical costs if they choose to medically transition, and can have trouble finding supportive medical professionals. In some states, including Ohio, bills have been passed that could allow medical professionals to deny care and services to people “on the basis of moral, ethical, or religious exemption,” according to the Human Rights Campaign

It doesn’t take a genius to figure out that a religious health care provider could legally deny care to a queer person because they object to their “lifestyle,” causing LGBTQ people to have to search harder for medical care or even go out of state.

When you put all this together, it’s no surprise that queer people can have a hard time making ends meet. A budget can’t fix the underlying systemic issues that keep queer people down, but it can help you ensure you have enough money to pay for the necessities each month, while still having some left over to spend on entertainment, clothes or whatever brings you joy.

How to create a budget as a beginner

A budget takes your total after-tax income and determines where you should spend it. It’s a good tool for anyone, whether you are scraping by on minimum wage or making six figures. 

Calculate your after-tax income

Before you can start a budget, you need to know your after-tax income. If you work for a company and get a regular paycheck, that’ll be the amount you bring home each month.

If you’re a contractor or a freelancer, you’ll need to deduct your expected taxes and business expenses from your income. The IRS provides some resources on what taxes look like if you’re self-employed.

If you earn a regular paycheck, add back in any pre-tax paycheck deductions like health insurance or 401(k). This will give you a more realistic picture of how much you’re spending on necessities and savings.

Use the 50/30/20 method

One of the easiest ways to determine a budget is to use the 50/30/20 method. The concept is simple:

  • 50% of your income goes toward necessities.
  • 30% of your income goes toward wants.
  • 20% of your income goes toward savings.

Of course, some expenses can be difficult to categorize — for example, a gym membership might be viewed as a necessity by some and as a want by others. Think critically about all your regular expenses to determine which category they fall into for you.

Necessities can include things like mortgage or rent, groceries, insurance, basic utilities like electric and water, child care, and minimum loan and credit card payments.

Wants can include things like entertainment, travel, expensive clothing and streaming services. There are some things that could fall in both the necessities and wants categories — for example, you need a winter coat if you live in a cold climate, but if you own several winter coats, a new one might be a want.

Savings include your emergency fund and retirement savings, but you should also include debt repayment in this category. It’s important to pay down debt (especially high-interest debt) if you want a successful financial future.

Choose a budgeting system

Now that you understand how to separate your expenses using the 50/30/20 method, it’s time to put your budget together. The first step is choosing a budgeting method that works for you.

Pick a method that’s easy for you to manage. If you choose a method that’s too complicated or takes a lot of time to maintain, you’re less likely to stick with it.

There are a few budgeting methods out there, including the envelope system and zero-based budgeting. Here’s a little on each of these methods to help determine which is right for you.

The envelope system 

The envelope system is exactly what it sounds like. Using this method traditionally, you’ll create envelopes for each category and put the cash budgeted for that category in the envelope. Over the month, you’ll take money from the envelope to pay for items within this category, and once the money runs out, you’ll have to stop spending in that category until the next month.

For example, you might have an envelope for your entertainment budget. Every time you go out for dinner, go to a movie or go to a club, you’ll use money from that envelope. Once the money has gone, you’ll have to skip meals out or parties for the rest of the month.

It’s not common anymore to pay for things with cash, but that doesn’t mean you can’t use the envelope system. 

Rather than putting physical cash in an envelope, you can use a spreadsheet to track your expenses. Create a tab or a column for each category and assign an amount you should spend in that category. When you spend money, add the expense to the appropriate category. This helps you track your spending and tells you when you’ve reached your limit for each category.

Or you can use a budgeting app that links to your bank account and automatically tracks and categorizes your spending. Automating your expenses this way is easy, but there’s always the chance that the app will miscategorize some expenses. Check in every week to correct anything that’s labeled incorrectly.

Zero-based budgeting 

Zero-based budgeting allocates every single penny of your income to a category so your ending balance each month is $0. You’ll input your monthly income into a spreadsheet or app and then list out every single expense each month. That includes all of your necessities, wants and savings. 

This budgeting method requires some prep work. Before you can start, you’ll need to track your spending for a few months to see where your money is going. Once you know that, you can determine whether you’re spending too much on wants that could go to savings or whether your needs are costing more than 50% of your income, so you can make cuts where you can.

Once you get going with zero-based budgeting, it can be a great way to know where every penny you earn is going. But it does require a lot of time and effort to keep up. You’ll need to be diligent about tracking expenses through the month and watch what you spend like a hawk. 

A zero-based budget can also be hard to maintain if you encounter unexpected expenses, such as a car repair, but having an emergency fund can help with that.

If you don’t have a predictable income (for example, if you’re a freelancer or service worker), the zero-based budget isn’t a good option. This budget method works best when you know exactly what your after-tax income will be each month.

Budgeting FAQs

Still have questions? Here are the answers to some of the most-asked questions about budgeting.

How do you make a budget and stick to it?

The key to making a budget and sticking to it is consistency. Choose your method and make sure you check it frequently and track all your expenses. Be honest with yourself and always ask whether you need or want to make a purchase and how that fits into your budget. If it’s the latter, that’s OK; but if you’ve exceeded your allowance for “wants” that month, it’s best to hold off on making the purchase until the following month.

Make sure the method you choose isn’t too complicated, which will make it easier for you to stick to. For that reason, a budgeting app or a bank account with spend tracking is a good choice for many people, because it can automate your tracking and alert you if you go over in a certain category.

What is the 30-day rule?

Impulse spending can be a real barrier to successful budgeting. You can curb your impulse buys and stick to your budget more easily by implementing the 30-day.

The 30-day rule says you should wait 30 days before buying something you want. If, after 30 days, you still want the item, you can purchase it. But often, 30 days will go by and you’ll realize you’re not thinking about the item anymore and can do without it. That’s money saved!

Why do budgets fail?

Your budget may fail for many reasons. For example, you might choose a budgeting method that’s too complicated and takes too much time to keep up, and you’ll abandon it. That’s why it’s a good idea to consider which method will be easiest for you to stick with.

Your budget might also fail if you’re not honest or clear about where you’re spending money. Failing to track certain purchases can make it seem like you’re sticking to your budget while you’re racking up credit card debt or dipping into your emergency savings for non-emergency items.

Creating and sticking to a budget can help make sure you’re on track to reach your financial goals. If you have specific questions about your personal financial situation, reach out to a financial advisor to make a plan that makes sense for you.

Catherine Hiles (she/her) is a writer, editor, mother, friend and ally. She lives in Ohio with her husband, two kids, and sweet but wild pit bull mix.

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4 Big Ways to Stretch Your Dollar in an Expensive (but Inclusive) City

If you grew up in a small town, you may not have been able to live as your authentic self for fear of retribution, or even violence. Some rural communities and small towns might be much less welcoming to queer people than most larger cities. 

This could push you to settle in a big city as an adult so you can live in a more inclusive and welcoming environment where you can grow into the person you’re meant to be.

But big city living comes with a big price tag. Everything, from rent and food to entertainment, costs more in major cities, which can be a huge roadblock — especially true LGBTQ folks, who may also face discrimination in healthcare, education, housing and employment.

Living in a queer-friendly city doesn’t have to bankrupt you, though. Here are some tips to help you succeed in your new home and live within your budget.

1. Look for ways to save

There are many ways to save money and live frugally, even in a pricy city. Here are just a few examples. 

Buy used items 

New clothes can be expensive — and with mass-produced items, you always run the risk of showing up to a party wearing the same outfit as someone else. 

Rather than buying your clothes new, check out your local thrift and consignment stores. You can save a ton of money on your wardrobe and find unique items.

Also look for used furniture, books, exercise equipment and electronics. Scour your area for garage or yard sales or check out peer-selling sites like Letgo, OfferUp and Facebook Marketplace to find deals in your area. 

Pro tip: If you meet a stranger to pick up an item, take a friend with you and choose a public meeting place. You can never tell whether that stranger on the internet is legit or looking to rip you off (or worse).

Spend less on food

Buying food doesn’t have to be expensive; you just might need to plan ahead. Try these tips:

  • Meal-prep when you can so you’re not tempted to grab takeout after a long day. 
  • Consider couponing and rebate apps like Ibotta, Fetch and Dosh to find deals on grocery items you buy frequently. 
  • Buy the generic or store brand of most foods rather than the name brand. It can save you money over time — and it’s usually the same stuff!
  • If you enjoy eating out with friends, make a list of affordable restaurants and suggest those when you’re making plans. Meal swaps and potlucks are also a an alternative, affordable option and a great way to connect with your chosen family in a new city!
  • If you enjoy cooking, look for copycat recipes of your favorite restaurants and make them at home. Invite your friends over to sample your cooking and see how it compares to the real thing.

Look for free entertainment

Even in big cities, there is plenty of free entertainment to be found. Many museums and art galleries operate on donations rather than entry fees, so if you’re looking for something to do but don’t have any extra cash, you can spend an afternoon wandering around and looking at artifacts. 

Most big cities also have plenty of green spaces that are free to use. Consider packing up a picnic lunch and spending the day in the park with friends, people-watching or just chatting.

Look for free social events and meetups through your neighborhood LGBTQ center, especially when you’re new to the city. This is the perfect place to meet people and spend time in the environment you came to the city to discover.

Once you’ve connected, host game nights or movie nights at your apartment for your people. Have everyone bring a snack or drink to share, and you provide the entertainment. It’s not quite the same as going to the movie theater or the club, but you can have plenty of fun at home with the right people.

2. Find affordable housing

Housing is the biggest monthly expense for most people, and the proportion of your expenses it takes up is even greater in big cities. 

Most cities have a wide variety of neighborhoods, each with unique benefits, even if they’re not right downtown. Find neighborhoods with an average rental price that aligns with your budget, and ask the local LGBTQ center for advice on the most queer- and trans-friendly options. 

Start your research before you move to the city. Visit first if you can, and ask locals which neighborhoods they like. You can talk to baristas, cab drivers, friends you have in the city and LGBTQ groups and forums to get an idea of where to base your search. 

Explore the neighborhoods they suggest to make sure they offer the diversity and inclusivity you need. Then hunt for apartments and roommate-matching sites (or find brokers in New York) to see what’s available in your price range. 

Be prepared to compromise on some of your wants in order to find a place that fits your budget.

3. Consider smaller, yet still inclusive, cities

Big cities like New York and San Francisco are wonderful places to live if you’re queer, but the cost of living makes it impossible for many people to live comfortably there. 

Rather than living in an expensive city and worrying about money every month, consider a smaller city with a more affordable cost of living.

Cities like Minneapolis and Denver are welcoming to LGBTQ folks and have a lower cost of living than cities on the east or west coasts. In Minneapolis, check out the Lyn Lake neighborhood, which is known for its queer-owned businesses. Denver’s Capitol Hill and River North Arts District are popular places for queer people.

College towns also tend to be more progressive and LGBTQ-friendly than other cities, even in small towns or rural locations. Even in more conservative states, you can find solace in these towns. 

Check the Campus Pride Index to see which universities are considered the most LGBTQ-friendly in each state, and look at apartments and amenities in that area to see if it’s a good fit for you.

It’s also a good idea to narrow your search to states that rank high in the LGBTQ policy tally — for 2020, only 14 states ranked “high” on the map, while over half rank at “fair,” “low” or “negative.” Big cities in the lower-ranked states still tend to be welcoming for queer people, but state laws are not necessarily supportive of our community.

4. Reach out for help

Sometimes you try everything but still have trouble making ends meet. Luckily, there are several resources that can help you get back on your feet.

  • Food banks: If you’re short on food and don’t have the money to buy more, look into food banks and food pantries in your area. This might not be a resource you need to use regularly, but it can help fill your stomach if you’ve had a bad financial month and need assistance. You can search for local food banks through Feeding America.
  • Rental assistance: If you’re really struggling to find a place to live within your budget, look for rental assistance programs in the area. People who earn less than 50% of the median income in your area may qualify for assistance from the U.S. Department of Housing and Urban Development.
  • Health care support: Organizations like Point of Pride can help if you’re having a hard time accessing gender-affirming care. Point of Pride helps fund essential care for trans folks so you can access the care and support you need.

Moving to an inclusive city can be an expensive choice, but by doing what you can to save money and live frugally, you can live your authentic life in a welcoming new city without worrying about being judged or discriminated against by the small-minded people from your hometown.

Catherine Hiles (she/her) is a writer, editor, mother, friend and ally. She lives in Ohio with her husband, two kids, and sweet but wild pit bull mix.

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