The Number One Thing You Should Fix in Your Budget

Sponsored by Fizz

Whether you’re currently in college, a recent graduate, or are finally getting your financial life in order, The Back-To-School Budget series has something for you. Welcome. 

For the next four weeks, we’ll be getting back to financial basics, from figuring out a savings plan that actually works for you to finding more flexibility in your day-to-day spending. And thanks to Fizz, you can start building credit safely as you master all the basics of managing your money.

When you first dip your toes into the world of budgeting, it can be easy to fixate on cutting back: doing a no- or low-spend challenge, culling your streaming services, or reducing grocery costs. And while this can certainly be helpful for getting your spending under control, there’s one budgeting tactic that doesn’t get nearly enough attention: making sure you can afford your fixed expenses. 

Your fixed expenses include anything that does not change from month to month. This category might include necessary spending categories like your rent, car payments, phone/internet bills, student loans, insurance, etc., as well as nice-to-have-but-still-necessary recurring charges such as streaming services, a gym membership, or app subscriptions. 

Today’s task: Calculate how much space your fixed expenses are taking up in your budget. 

• First, look at your paychecks: How much are you taking home every month after taxes? If your pay is inconsistent, find the average of the last six months or so, or your average monthly income since you started your current job(s). 

• Then, go through your bank/credit card statements and highlight every single fixed cost. Add them up. What’s the total?

• Find your leftover budget number: Monthly take-home pay - fixed costs = $_________

• Is that leftover number a reasonable amount for you to spend on everything else? This would include any variable costs like groceries, dining out, personal care, savings, etc. 

If your life is not affordable with your fixed expenses where they are, here are some good places to start:

• What can you cut out? Start with streaming services/memberships, and other optional recurring expenses that aren’t actively adding to your life. 

• What can you negotiate? A fixed cost like your phone bill feels inflexible, but that doesn’t mean there’s no room for negotiating. Alternatively, look into other providers for price comparisons on things like phone and internet.

• What can you change further in the future? For instance, you may be stuck with your current rent for the time being, but can you lower that cost over the next few months, perhaps by adding a roommate? 

Once you’ve tackled your fixed costs, it’s time to take on the rest of your spending. That’s where Fizz comes in. Fizz is the #1 credit & money app for young adults. Whether you want to build credit, manage your money or have no idea where to start, Fizz is there to help you every step of the way.

One of our favorite features from Fizz is their credit building card with built in budgeting. There are no interest rates, late fees, or minimum deposits to worry about — and no credit checks or cosigners required. Fizz puts smart limits on your spending by connecting to your bank account so you won’t go overboard (without you having to think about it). And it’s automatically paid off from your connected bank account every day so that you don’t build up a big balance throughout the course of the month. Users also get real-time spending insights, access to budgeting tools, real time credit monitoring, and more. 

Take the guesswork out of your spending and join over 100,000 members to kickstart your financial journey. Click here and use code TFD to get your 30-day free trial of Fizz!