A 33-year-old mother who previously struggled with balancing her budget now is a financial counselor and is known by her 1.5 million followers and counting as “The Budget Mom.”
Kumiko Love runs a successful blog that has freed many from financial binds.
“I really want to teach my readers [they can] have this life they truly love, but living in a way where it’s not putting them in debt,” Love shared with “Good Morning America.”
“It’s about showing what that looks like in a real person’s life, which is why I share my real numbers with my readers.”
Love recently posted her budgeting method on her site where it has been shared 141,000 times.
“My budgeting process incorporates three different methods — the Calendar Method, the Paycheck Method and the Cash Envelope System,” Love writes on thebudgetmom.com.
“Trust me, no one in the world had printables or worksheets that incorporated all three of these methods into one system or template. So, I decided to design my own.”
“I am a firm believer that my budgeting method can work for anyone, no matter their income size or schedule. As long as you put in the work to make it personal and realistic to your own life, there is no doubt in my mind that you can be successful.”
The first method Love suggests using is the Calendar Method.
First, you have to identify the regular bills you are responsible for which are bills that are usually around the same amount each month.
For example: rent, student loan payment, gym membership, utilities, etc.
Using a calendar, Love also designates dates for expenses as well. In addition, she writes down the calendar dates when she gets paid.
Love considers herself a paycheck budgeter, which means she creates a budget each and every time she is paid.
“It’s a matter of writing down all my regular bills — my monthly bills first,” Love shares in her Youtube tutorial. “Then what I do is I assign which bills I want to pay with what paycheck.”
In addition, Love also uses the calendar to identify pop-up expenses for birthdays as well as holidays.
The second method Love suggests using is the Paycheck Method.
Love suggests that before you budget, you MUST know where your money is going.
“[R]evealing the ugly truth about your spending can be scary, and you might not even want to know the truth. But if you don’t face it head on, you will never make any progress with your finances,” she posts on thebudgetmom.com.
“First comes awareness, and then comes progress.”
Once your are aware of your expenses, you can start budgeting with Love’s paycheck bill tracker.
The bill tracker was designed to create a zero-based budget which means your income minus expenses equals zero.
“Zero based budget is to create a plan for every dollar,” Love shared. “So every dollar [you] make is being used for a place in your budget. If it already has a place, then we get rid of mindless spending.”
Love has two bill trackers for each month – one for the paycheck she receives on the 5th of the month and another for the paycheck she receives on the 20th.
And last but not least, Love also uses the Cash Envelope System.
Once all of your bills are accounted for on your calendar, figuring out and budgeting all of your other monthly expenses comes next.
Love titles these as “variable bills,” and they are separate from priority bills like rent and electric.
“For example, one month you might spend $30 on clothes, the next month you might spend $400,” Love posts on her blog. “You have complete control over how much you spend on these items.”
An example or two of these variable expenses include:
- Clothes
- Food
- Entertainment
- Household Items
- Gas
After you have decided which categories in your budget are variable expenses, then you can set a limit for each.
“Remember, you will probably tweak these limits as you go, and you should be updating or looking at these limits every time you update your budget,” Love shares.
In addition, using cash limits your debit and credit card use so you are not putting yourself in more debt when paying for variable expenses.
Love shared how it is also important to track your ever-increasing net worth to make sure you are making progress throughout your budgeting journey.
Which means you should not be increasing your lifestyle costs whenever your income increases.
With Love’s budgeting methods, she met her goal of leaving behind $77,000 in debt which included $32,000 in student loans, a $16,000 car loan and some some credit card debt.
You can learn more on how to balance your budget, here.