Right Size the Budget

Interactive Video

[A couple sitting on the sofa. Both are peering into a takeout bag as the woman reaches inside.]

Narrator: Have you ever heard a saying like this one? "A lobster appetite on a mac-n-cheese budget?".

[On screen Text]:

Option 1: Yes, I have heard that before.

Option 2: Nope, never

We’d all like to live like kings and queens with unlimited funds but unfortunately, that’s just not reality. 

[A man and woman smiling, wearing crowns. Money streams down in front of them and disappears as the crowns fall off.]

Neither is Goldilocks from the famous fairy tale, where she wanted everything to be “just right.” 

[An open book showing a scene from the fairytale, Goldilocks and the Three Bears. The three bears are sitting at a table by the fireplace eating porridge.]

[On screen Text]: I want everything just right. ([An “X” appears over the words.)]

To be financially responsible, it’s important to “right size” your spending and savings to live within your means. A budget can help you figure out what the right size is for you. 

[A man holding a sign between his hands that says "SPENDING" and "SAVINGS".]

How many of these services do you currently pay for regularly? Select all that apply.

[Onscreen Text]: 

Option 1: hair salon

Option 2: lawn care

Option 3: streaming services

Option 4: ridesharing (Uber, Lyft)

Option 5: manicures/pedicures

Option 6: food delivery

Option 7: house cleaning

Option 8: none of these

The right size budget fits your income and your expenses and provides a solid framework to make sure you don't go over the limits you've set for yourself.

The best place to start is with your existing money habits. Compare your income to what you spend. That’s not just purchases but your monthly bills too. Consider your needs and wants and how they mesh with your spending habits.

[Two people sitting on the sofa. Both are peering into a takeout bag as the woman reaches in.]

For any oversized expenses, brainstorm ways that you could reduce them.

[On screen text:]

Oversized Expenses

Brainstorm ways that you can reduce them.

[A craigslist ad selling a used bike.]

In the “needs” category, you could reduce your food expenses. Maybe eat out less or at cheaper restaurants. Pack food to take to work. And comparison shop for groceries. Use stores’ savings apps, online promo codes, and good old coupons!

[On screen text]:

Food

• Eat out less or at cheaper restaurants.
• Comparison shop.
• Use savings app, online promo codes, and coupons

[A lunch packed in several metal tins, sitting on the counter.]

Transportation is a need but there’s many opportunities to reduce what comes out of your pocket. If you drive, gas apps can help you compare prices. Look for places where the price per gallon is reduced a little when you pay with cash.

[On screen text]:

Transportation

• Use gas apps to compare prices.
• Look for places where the price per gallon is reduced with a cash payment.

[A sign advertising gasoline at $3.99 per gallon for regular gas when paying with a credit card and $3.89 per gallon when paying with cash.]

If you own a car, evaluate your insurance coverage. Imagine losing your car in an accident: is your coverage enough or too little to avoid costly damage expenses?

[On screen text]:

Insurance

Evaluate your insurance coverage.

[Two cars in a head-on collision.]

And, of course, there’s public transportation, which can be cheaper than a car. Even if you don’t take public transport every day, it could save on gas or parking for some days.

[On screen text]:

Public Transport

Take public transport periodically to save on gas and parking.

[A man listening to headphones while riding public transportation.]

Conserve on your utilities— turn off extra lights and keep your heat or AC at reasonable levels.

[On screen text]:

Utilities

• Turn off extra lights.
• Keep your AC at reasonable levels.

[A hand reaching to turn off a lamp.]

Your “wants” category normally has even more opportunities to reduce expenses. Consider some “do it yourself” services where you can save a dime. Maybe offer to trade services with a friend that might be mutually beneficial.

[On screen text]:

Wants

• Consider some DIY services to save a dime.
• Offer to trade services with a friend.

[A person bathing a dog outdoors.]

How about trying some free entertainment like free outdoor concerts vs. paying to attend a concert? Or reducing streaming service subscriptions to one or two favorites?

[On screen text]:

Entertainment

• Try some free activities like free outdoor concerts.
• Reduce streaming service subscriptions to one or two favorites.

[Several people sitting on blankets watching a concert in the park.]

The point is to challenge yourself to find ways to get to the right size for all your expenses and still have room for savings and some wants.

[A woman looking thoughtful. The woman’s thought bubble contains the words: expenses, savings, some wants.]