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How to budget like a financial grownup

Where do you even start? Brandi Smith got answers from certified financial planner Bobbi Rebell.
Credit: KHOU
Monthly budget planning sheet with pen and wallet

HOUSTON — For so many of us, the pandemic and related shutdowns taught us how to do more with less. Budgeting is a key part of that. So where do you even start? I talked to certified financial planner Bobbi Rebell to find out how to be a financial grownup.

BOBBI: You have to really think about what your life is going to be like in the next few months, the next year and the next five years. From there, you can put together an individualized budget. 

BRANDI: This is what I feel like is missing so often, we kind of gloss over. I need a step-by-step how-to guide.

STEP ONE: PAY YOURSELF FIRST

BOBBI: If there's anything we've learned over the last year, it's that we really want our cash cushion to be extremely cushy. We used to talk about an emergency fund of three to six months. Here's the thing: it should be more.

STEP TWO: USE CORPORATE MONEY

BOBBI: Make sure you are making the most of any corporate money that is available to you. For example, in retirement funds, that you're putting away at the minimum enough to get the matching numbers.

STEP THREE: PAY DOWN DEBT

BOBBI: Make sure you're paying down your debt as aggressively as makes sense for you. But always the minimum payments. If you don't make the minimum payments, that's going to kill your credit score and you'll pay higher rates for everything.

STEP FOUR: FIGURE OUT NON-NEGOTIABLES

BOBBI: Non-negotiables are sometimes more negotiable than we'd like to admit. I would say housing, food, utilities, things like that. 

STEP FIVE: ADD UP TREATS

BOBBI: Then you want to go to the next tier, which is the mainstream-I-want-to-live-my-life-this-way lifestyle things that you want to be doing in your everyday life. Things like 'I want to have that cup of coffee on my way to work now that I'm going back to the office because I enjoy that ritual.' Build it into your budget.

STEP SIX: ICING ON THE CAKE

BOBBI: The icing-on-the-cake layer is the really awesome things you hope you can afford and I hope you guys can too.

For more information about how to budget like a financial grownup, visit Bobbi's website.