Your goal is to establish a set of bill obligations that build credit and provide a consistent basis for investment. But, starting from the bottom, you may not have the financial means to feel confident “managing your money.” To that proposition, you ask, “What money?” I get it. I have been there.
We can talk about budgeting in earnest at another time but wrap your mind around the idea of reducing your expenses. How much of what you spend money on is a necessity, and what portion is mood-music, status-seeking, and don’t know any better? Reductions are a challenge in the former two, but the latter just needs some research. Look at your bills and purchase plans. Explore lower rates, updated plans, discounts you may qualify for, and other ways to pay less for what you now pay for. Credit (including cash back enrollment), cell phone, cable/internet, insurance are some typically fruitful areas to explore.
I will not take for granted that you know what I mean by necessities. Most people think of the right categories of things, but they are immediately rebellious about the list being finite and intractable. My approach is to remove those limitations from the designation of your necessities. After all, the goals here are a consistent practice of discipline and sustainable choice behavior. Your achievement of those goals may be hampered by the overly-ambitious and constricting nature of your list of necessities.
The reasonable result is a list that includes your typical suspects: utilities, rent/mortgage, transportation, health & hygiene, cell phone, and fuel. I add to this list budget items that are quality of life items based on your lifestyle. These may include data allowance on the cell, home Internet, weekly entertainment, eating out, and an additional health & hygiene allowance. The point is that you may be able to limit these and reduce their drain on your budget, but you will most likely not eliminate them even though they are not technically necessities. The key is to bring them into alignment with the capacity of your budget—to live within your means.
Mood-Music is the term I give to your utilization of money to improve your mood. You may be buying food, experience, toys, or something else. The issue I have with this is that it artificially inflates your spending and potentially destroys your ability to budget. Budgets are predictable. Your mood can be suddenly impacted by a phone call or a social media post. Moreover, the purpose of money is lost on mood and emotion. You can’t buy love or happiness. Yet, spontaneous and out-of-budget purchases can often leave you feeling worse. You now have increased debt or less money along with the poor mood.
The solution is first to break the connection between the two. Money is not related to mood. No purchase can impact your mood. Practice this by employing other measures to intentionally control your mood. Nature, breathing, bathing, or meditating are several options. I am a strong proponent of activities that focus inward even while expanding outward to explore your feelings, promptings, and reflections.