Help me help my friend create a budget
March 15, 2025 10:03 AM Subscribe
How can I help my money-management-challenged friend get on top of monthly spending?
Hello,
My friend is newly divorced, and their former spouse handled all of their financial matters. They were given money to spend and didn't have to think about the rest. They now find themselves living alone with a stressful new job, and no budget to guide their spending.
When attempting to create a budget system in the past, they have overcomplicated things by getting so bogged down in the mechanics of creating the perfect system that the actual budgeting got lost and never happened. They are feeling better now, and hopefully are more capable of keeping things simple and on task.
I'd like to help by providing a consultation with a professional to help create a detailed, workable plan for money management. I'd like to find someone who would sit down with them, ask all the questions and look at all the numbers, and my friend would leave with a plan. Would that be a financial planner? My friend is in the NYC/NJ area if any of you have specific recommendations.
Short of a personal consultation, can you point me toward any straightforward, user friendly resources for creating a simple budget?
Thanks very much!
Thank you!
Hello,
My friend is newly divorced, and their former spouse handled all of their financial matters. They were given money to spend and didn't have to think about the rest. They now find themselves living alone with a stressful new job, and no budget to guide their spending.
When attempting to create a budget system in the past, they have overcomplicated things by getting so bogged down in the mechanics of creating the perfect system that the actual budgeting got lost and never happened. They are feeling better now, and hopefully are more capable of keeping things simple and on task.
I'd like to help by providing a consultation with a professional to help create a detailed, workable plan for money management. I'd like to find someone who would sit down with them, ask all the questions and look at all the numbers, and my friend would leave with a plan. Would that be a financial planner? My friend is in the NYC/NJ area if any of you have specific recommendations.
Short of a personal consultation, can you point me toward any straightforward, user friendly resources for creating a simple budget?
Thanks very much!
Thank you!
I don't have any particular resources, but I've found helpful for myself, someone who develops budgets for others for a living, is to begin by recording monthly balances in a spreadsheet. So cash in banks, any credit card or long-term loan debt, other investments if applicable, blah blah blah. Types of assets / debt are the rows, months are the columns.
Cash/assets positive numbers, credit / debt negative numbers. Do a SUM to the bottom. Is number going up or is number going down? If number is going down, maybe it makes sense to review account activity over the period of the month(s) where it's going down. You can look between the months by row to see if a particular account is creating the most significant decrease to target the review. If this feels too overwhelming, resourcing for comfort and feelings of safety and, if possible, abundance can go a long way. At a certain point looking at some of this stuff can elicit a freeze response ime with myself and a number of staff heads, so pivoting completely away from the numbers and towards strictly emotional resourcing has been very helpful.
I found this approach the easiest to get started because it's just counting. It's counting basically your net worth at a point in time, which feels much more intuitive to me. Then, if you see an issue, it's a bit easier to dig into the details because you have the more tangible understanding of how it's impacting your bottom line net worth. I.e., you discover there is something worth investigating, and then you go investigate real purchases. Often I found, starting with the budget is like starting with a straight jacket that is coming towards you. Starting with historical trends/data is starting with a reality that was lived.
If this ends up feeling manageable, the next step might be to add a tab to this workbook to mark up monthly recurring costs like rent, insurances, groceries, subscriptions, etc because those are going to be your baseline costs that are not going to fluctuate (or might if you decide you can cut one or two out). Now you can start thinking about discretionary spending.
I know this isn't a panacea, but it's a framing I found useful.
posted by CPAnarchist at 11:17 AM on March 15
Cash/assets positive numbers, credit / debt negative numbers. Do a SUM to the bottom. Is number going up or is number going down? If number is going down, maybe it makes sense to review account activity over the period of the month(s) where it's going down. You can look between the months by row to see if a particular account is creating the most significant decrease to target the review. If this feels too overwhelming, resourcing for comfort and feelings of safety and, if possible, abundance can go a long way. At a certain point looking at some of this stuff can elicit a freeze response ime with myself and a number of staff heads, so pivoting completely away from the numbers and towards strictly emotional resourcing has been very helpful.
I found this approach the easiest to get started because it's just counting. It's counting basically your net worth at a point in time, which feels much more intuitive to me. Then, if you see an issue, it's a bit easier to dig into the details because you have the more tangible understanding of how it's impacting your bottom line net worth. I.e., you discover there is something worth investigating, and then you go investigate real purchases. Often I found, starting with the budget is like starting with a straight jacket that is coming towards you. Starting with historical trends/data is starting with a reality that was lived.
If this ends up feeling manageable, the next step might be to add a tab to this workbook to mark up monthly recurring costs like rent, insurances, groceries, subscriptions, etc because those are going to be your baseline costs that are not going to fluctuate (or might if you decide you can cut one or two out). Now you can start thinking about discretionary spending.
I know this isn't a panacea, but it's a framing I found useful.
posted by CPAnarchist at 11:17 AM on March 15
I've done this for a divorced friend. As CPAnarchist (eponysterically) noted, we started with a spreadsheet that let her write down all her spending. 24 rows for each month. Columns were "household", "food", "entertainment ", "personal care", "kids", "charity", "other", and "saving". I set up the sheets to sum all the categories each month and also yearly.
The first step to a functional budget is understanding how money is currently being spent. Then reflecting on the expenses to make sure they are inline with income and priorities. She's been going strong for 3 years now, and we frequently chat about how we are spending our money. It's been a game changer for my friend!
posted by Sauter Vaguely at 12:29 PM on March 15 [3 favorites]
The first step to a functional budget is understanding how money is currently being spent. Then reflecting on the expenses to make sure they are inline with income and priorities. She's been going strong for 3 years now, and we frequently chat about how we are spending our money. It's been a game changer for my friend!
posted by Sauter Vaguely at 12:29 PM on March 15 [3 favorites]
Seconding the financial counselors through any free program if your location provides them.
However, tracking spending first the way Sauter Vaguely says is something I ALSO recommend that finally helped me with budgeting. Knowing what you're already spending for things makes it way easier to plan a budget for what you WANT to spend - you're making educated choices about budget items instead of just randomly picking numbers. And it can even help you spot things before you create the budget even - if you track your spending and notice that "holy shit, I spent $200 last month just on BOOKS???" that jumps out at you as an immediate thing to change, even without a budget ("okay, lemme use the library instead more often".
posted by EmpressCallipygos at 4:14 PM on March 15
However, tracking spending first the way Sauter Vaguely says is something I ALSO recommend that finally helped me with budgeting. Knowing what you're already spending for things makes it way easier to plan a budget for what you WANT to spend - you're making educated choices about budget items instead of just randomly picking numbers. And it can even help you spot things before you create the budget even - if you track your spending and notice that "holy shit, I spent $200 last month just on BOOKS???" that jumps out at you as an immediate thing to change, even without a budget ("okay, lemme use the library instead more often".
posted by EmpressCallipygos at 4:14 PM on March 15
Ok, if they were given a 'spending money allowance', then maybe just keep rolling with that, but a system so *they* are the one giving themselves an allowance.
So, have pay going into a bank account that has AutoPay for all the big regular bills, like rent etc.
Don't have any cards for this account, and even lose or hide the online banking password.
Each week, have an automated payment going to another account, preferably with a different bank etc. This is the one with cards, and normal access - this is for weekly spending money for food, petrol, and "wants". Live like this is your only money.
Congrats, you are now managing your money!
posted by Elysum at 12:04 AM on March 16 [1 favorite]
So, have pay going into a bank account that has AutoPay for all the big regular bills, like rent etc.
Don't have any cards for this account, and even lose or hide the online banking password.
Each week, have an automated payment going to another account, preferably with a different bank etc. This is the one with cards, and normal access - this is for weekly spending money for food, petrol, and "wants". Live like this is your only money.
Congrats, you are now managing your money!
posted by Elysum at 12:04 AM on March 16 [1 favorite]
I found the r/personalfinance wiki to be helpful on this. Here is a link.
It covers making a budget and then using popular methods to evaluate your budget, such as the 50/30/20 rule popularized by Elizabeth Warren's books.
This is from the sidebar to the subreddit and is a couple layers deep, so it may not be readily apparent.
posted by statusquoante at 5:06 AM on March 16 [1 favorite]
It covers making a budget and then using popular methods to evaluate your budget, such as the 50/30/20 rule popularized by Elizabeth Warren's books.
This is from the sidebar to the subreddit and is a couple layers deep, so it may not be readily apparent.
posted by statusquoante at 5:06 AM on March 16 [1 favorite]
In a vaguely similar situation, I found You Need a Budget YNAB, and it has transformed my understanding of my budget and my money. It is definitely one of those things that doesn't work for everyone, and it takes a month or two to get the feel of it. But it's really good for getting a handle on what you have and what you are spending.
posted by gingerbeer at 2:35 PM on March 16 [1 favorite]
posted by gingerbeer at 2:35 PM on March 16 [1 favorite]
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It is likely that if they call 211 and speak to the operator, they will find a similar program for NJ or a nonprofit that does the same thing. Also check with your local library, they often know who is offering this kind of thing in your area.
posted by blnkfrnk at 10:21 AM on March 15 [2 favorites]