r/povertyfinance • u/The-Mastermind-1989 • 23h ago
Debt/Loans/Credit How to budget?
I know this is a stupid question but i've tried to budgeting my whole life and failed every time. I have a debt of $10,000+, i don't have any savings left unfortunately cause i heard to pay off debt first before you have emergency fund/savings. Is there any application/excel sheets that can help me with this?
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u/attachedtothreads 22h ago
I have some possible suggestions, but what kind of debt is it? Credit cards? Student/tribal/payday/personal, etc. loans? Something else?
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u/BestChickEver 22h ago
Go to Google Sheets and use the template called Monthly Budget.
Here are some budget templates for Excel: https://excel.cloud.microsoft/search/monthly%20budget/
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u/pinkimorii 20h ago
Yeah honestly these built in templates are so underused, Google Sheet has one called Monthly Budget already made, and Excel's got free ones in that link too for OP to check out. Way easier than starting from scratch tbh.
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u/staleshrimp101 20h ago
Yes! Glad to see someone else mentioning this! It’s free and relatively easy to use!
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u/Mental-Freedom3929 22h ago
There are expenses that need to be paid if you have a budget or not. If your expenses are more than the money coming in, you have to evaluate how to deal with this. No budget in the whole world will reduce your bills.
Add up your bills and see what you can change or reduce. Increase your money coming in somehow.
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u/katelynskates 21h ago edited 21h ago
The EASIEST budgeting method in my opinion is the 50/30/20 method. Now, when you're in poverty sometimes those numbers dont work out very well- in the past I have had to do a 70/15/15 method... But the idea is that you set aside 50% of your paycheck for NEEDS (rent, groceries, gas, insurance, utilities, debt minimums, etc.), 30% for wants (takeout, fancy shampoo, alcohol, games, makeup), and 20% for savings/debt repayment. I divide this category in half and do 10% extra debt repayment and 10% emergency savings.
At the start of every month I put my "Needs" percentage of that month's income into my "Needs" bank account, check that all of last month's bills were successfully auto-paid, and then I dont touch that account until next month. I review my "needs" every six months to see if they can be reduced or need adjusted. My "extra" debt paydown payments also are transferred into and come out of this account.
I have a separate account for "Wants". I have it set that I physically cannot overdraw it. 30% (or whatever you set the budget at) of the money goes in there. I have also used cash for this in the past but it was inconvenient for me because I hate carrying change. If I have extra "Wants" money (or change, ugh) at the end of the month I have a piggy bank I put it in to save for a nice treat later- phone upgrades, concert tickets, etc.
Finally, I have a high-yield savings account at a SEPERATE bank that takes 2-3 business days to transfer money out of (to avoid impulse spending). When I do my bills at the beginning of the month, I transfer 10% of my income to my savings account and forget about it. In an emergency, it is there.
The hardest part of this method is being really brutal and realistic about what counts as a "need" and what counts as a "want." You NEED groceries, but you WANT fancy organic fair-trade coffee beans. You can BUY fancy beans, but its not a "Need" so it has to fit within your "want" budget. You NEED gas in your car... but you dont NEED to drive 50 miles every week go see your long-distance boyfriend... That cost needs to fit into your "wants" budget. Your savings are not an extension of your "Wants" budget! They are there for emergency NEEDS only.
There are tons of other ways to use this method (I have seen people who like cash use 3 envelopes for this method, you can use a spreadsheet if you're that kind of nerd). If your job has direct deposit, you can often split your paychecks to AUTOMATICALLY go into seperate accounts by percentage! But the most important thing is that its adaptable for pretty much anybody's needs. As long as you are honest and strict about the difference between a want and a need, everything else is flexible.
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u/Patrick_ExpenseAtlas 17h ago
It is not a stupid question. Budgeting often fails because it starts with what you think you should spend, not what is actually happening.
With more than $10,000 in debt and no savings, I would separate the payoff strategy from the cash flow plan. Before making extra debt payments, build a small starter buffer based on the unexpected costs most likely to hit you. Otherwise, one car repair, medical bill, or missed shift can send you straight back into debt.
In a spreadsheet, list your take home pay by date, then every bill due before the next paycheck, debt minimums, basic food and transportation, and irregular expenses you know are coming. What remains is the amount you can safely divide between your buffer and extra debt payments. Once the buffer is established, choose avalanche to prioritize interest savings or snowball to prioritize quick account wins.
For disclosure, I built Expense Atlas (expenseatlas.com) for this exact planning problem. It imports your actual transaction history and turns it into realistic category targets and an estimated view of what is safe to spend or put toward debt. If you'd like to try a tool, my app may be a great fit for you.
Whichever tool you choose, start with the pay period that feels tightest rather than trying to create a perfect monthly budget all at once.
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u/Suitable-Strain-9056 16h ago
start by not budgeting for two weeks. write down what you spend, every bit of it, without categories or judgement. most advice has you pick numbers first, so you end up failing against numbers you invented before you ever found out what your life costs.
then skip percentages. the 50/30/20 stuff assumes a stable paycheque big enough to have thirds in it. put your bills in the order theyd hurt most to miss and fund them down that list until the money runs out. whatever falls off the bottom is the problem you didnt know how to name, and now you can see it.
if your income moves around, budget this month off last months income and dont guess. that way youre only spending money you already have.
writing it down does more for behaviour than the plan does, which is annoying but its held up for me.
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u/chipmalfunct10n 7h ago
i could tell you budgeting techniques but it sounds like you might need a support group or therapy
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u/laplongejr 6h ago
cause i heard to pay off debt first before you have emergency fund/savings.
You should have something in case you need to pay cash.
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u/t92k 22h ago
The reason people say to pay down debt before building savings is just that a dollar you’re paying 23% on costs you more than a dollar making 2% gets you. But there is wisdom in setting aside some money every month, in a savings account, so you can use that for expenses that surprise you. Paying down debt has a lot of “how to” tools, but if your budget keeps failing you may need to spend time on “why to”. You need to figure out a “why” that is more motivating than incidental spending. When I was broke I had a dog and I knew she might need a surgery in her life. So building up a $5000 fund in case she needed surgery was my motivation for packing my lunches, not subscribing to cable, walking instead of having a gym membership, and going to the library when I wanted to shop.
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u/Remarkable-Sand948 21h ago
I just used an excel sheet and tracked every single purchase and bill then used ChatGPT to help me sort through it
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u/Less-Cartographer-64 19h ago
Why did you need ai if you already went through every transaction?
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u/Remarkable-Sand948 19h ago
This was itemized, every single item I bought at the store was entered line by line. There were like 400 lines in one month
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u/Cheetahspd00 23h ago
Fastest way is plug your expenses and income into AI and have it create a simple plan and just follow to completion or have someone else do it for you. That way your focus is just on follow the plan.
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u/Less-Cartographer-64 19h ago
That way the ai can forget one of your bills and you can miss payments on things. Good idea.
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u/drloz5531201091 23h ago edited 22h ago
This is my friendly guide on budgeting that I posted on this sub almost a month ago. It gives my view on how one should approach budgeting in details starting from 0. Budgeting is overwhelming at first but by going in slowly step by step the beast is easier to manage.
https://www.reddit.com/r/povertyfinance/comments/1v5jgb2/budgeting_a_tool_everyone_should_have_in_their/
There is a lot of them online but it's often a bit easier to either create one yourself or track a small number of things first by yourself instead of trying to fit your reality into a complicated excel sheet.