As requested I am showing off a couple of spread sheets of how we budget. Take a look and see the magic unfold! Then pull your hair out, cry and throw things when it doesn't work the first, second, third or fourth time! But, don't give up! And honestly once it starts coming together it will make you as giddy as a group of 5th grade girls at a Justin Bieber concert! Do I get bonus points for all that alliteration? I should.
The very first thing that you will need to do before deciding how to spend your money is to determine how much money you have coming into the house during the month. You will want to make sure that you name every dollar that comes into the house. If you cheat, you are only cheating yourself. So be as precise as you can and make sure that you account for every dollar that comes in.
I am including a link to show you possible income sources and what it should look like on your spreadsheet here. This list is no way exhaustive, but should help you get some ideas of where potential income comes from. I listed 2 places for a salary, but if you're married and one or both of you have a part-time job you will want to add another place for Salary 3. We have some irregular income that I will talk about later, so for now just stick with the income that you can predict with a reasonable amount of certainty.
Once you've decided the amount of income coming in you will then determine how to spend it. I'm including a link based on someone who has the expected income of $4,000 in a month here. For the purpose of this blog I used nice round numbers that will never happen in real life, but made it easier for me! Again this sample is not exhaustive, so if you pay a cable bill every month, you will need to add that onto your budget. You may also want to add things like restaurants or toiletries. I don't list food and toiletries/cosmetics separately, but you may want to - especially if you buy your cosmetics from a company like Mary Kay or some place other than your grocery store.
When we figure out our monthly budget we wait for the very end to enter an amount into the Emergency Fund, because our other bills must be paid first. Also if you don't have $1,000 in your Emergency Fund you shouldn't be paying anymore than the minimum payments on those bills. Once you've got a $1,000 then you can start paying more on those debts. But, that's another blog post for another day!
You will notice that I have a slot for a tithe. A tithe is the money that we give to our church on a monthly basis. If you don't tithe, you may want to change this category to "charitable giving".
OK, now what about those of you who have an irregular income? You will need to make a list of all of your bills, food, personal items etc. in order of priority. I would suggest that tithe, food and shelter should be at the top of the list. Next (in my opinion) would be your utilities and transportation. Then from there you can decide what's important to you... I'll allow you to make some of your own decisions on how to spend your money! ;) As you make your list include how much each item will cost you. When you get to the end of your money you've paid as much as you can on the list.
We have both regular and irregular payments during the month as I have mentioned before. So we always have a list of priorities for extra income. I would suggest that you do this even if you don't expect extra income. I believe that God blesses those who desire and work diligently towards being a good steward of your money and He may surprise you with extra money along the road! Also make the list extra long so that you're not tempted to squander your blessing!
When Hotsauce gets paid we sit down and write out checks for things that we can't pay in cash. Our natural gas and electric are normally paid online and our cell phone is paid over the phone. We do this because it doesn't cost us extra, if it did we would pay via check. We have some payments that are automatically withdrawn every month too. For all other things we use cash and tuck them in envelopes. I would love to buy an envelope system from www.daveramsey.com , but I haven't budgeted for them yet! So we've been using regular old white paper envelopes, but for those that I use frequently, I've been frustrated because they rip and fall apart easily. So Hotsauce sat down last night and made me new ones from pages out of a magazine and then used painters' tape over the top of it. Here are two that he made:
Here's a tip. Have a "blow fund". We don't have an entertainment fund, because right now our entertainment comes out of our blow fund. Our blow fund currently allows each of us to have $25 every 2 weeks. I believe this could be called our "sanity fund". We don't have cable. We don't have a restaurant fund right now either. Our extras come out of the blow fund. This money is spent however you choose. I don't tell Hotsauce how to spend his and I'm not accountable to him in how I spend mine (assuming that it's legal and glorifying to God the other spouse is hands off). You don't have to spend your blow fund each month, you can save it up for something bigger... which is my plan. Or you can nickel and dime it away on Mt. Dew and donuts. No one judges here. ;)
Last thing... remember that if you're married you both have to agree to the budget or it's a no go! I am 100% serious here. You must both be involved and have a voice or it will never work!
***It should be noted (just in case I don't mention it in every other breath) that I am not financial expert, nor do I play one on TV, and that these ideas are from my understanding of Dave Ramsey's book, The Total Money Makeover which youcan need to purchase online at www.daveramsey.com.
Anyone else have suggestions for simple budgeting? For those of you who are new to budgeting what things overwhelm you?
The very first thing that you will need to do before deciding how to spend your money is to determine how much money you have coming into the house during the month. You will want to make sure that you name every dollar that comes into the house. If you cheat, you are only cheating yourself. So be as precise as you can and make sure that you account for every dollar that comes in.
I am including a link to show you possible income sources and what it should look like on your spreadsheet here. This list is no way exhaustive, but should help you get some ideas of where potential income comes from. I listed 2 places for a salary, but if you're married and one or both of you have a part-time job you will want to add another place for Salary 3. We have some irregular income that I will talk about later, so for now just stick with the income that you can predict with a reasonable amount of certainty.
Once you've decided the amount of income coming in you will then determine how to spend it. I'm including a link based on someone who has the expected income of $4,000 in a month here. For the purpose of this blog I used nice round numbers that will never happen in real life, but made it easier for me! Again this sample is not exhaustive, so if you pay a cable bill every month, you will need to add that onto your budget. You may also want to add things like restaurants or toiletries. I don't list food and toiletries/cosmetics separately, but you may want to - especially if you buy your cosmetics from a company like Mary Kay or some place other than your grocery store.
When we figure out our monthly budget we wait for the very end to enter an amount into the Emergency Fund, because our other bills must be paid first. Also if you don't have $1,000 in your Emergency Fund you shouldn't be paying anymore than the minimum payments on those bills. Once you've got a $1,000 then you can start paying more on those debts. But, that's another blog post for another day!
You will notice that I have a slot for a tithe. A tithe is the money that we give to our church on a monthly basis. If you don't tithe, you may want to change this category to "charitable giving".
OK, now what about those of you who have an irregular income? You will need to make a list of all of your bills, food, personal items etc. in order of priority. I would suggest that tithe, food and shelter should be at the top of the list. Next (in my opinion) would be your utilities and transportation. Then from there you can decide what's important to you... I'll allow you to make some of your own decisions on how to spend your money! ;) As you make your list include how much each item will cost you. When you get to the end of your money you've paid as much as you can on the list.
We have both regular and irregular payments during the month as I have mentioned before. So we always have a list of priorities for extra income. I would suggest that you do this even if you don't expect extra income. I believe that God blesses those who desire and work diligently towards being a good steward of your money and He may surprise you with extra money along the road! Also make the list extra long so that you're not tempted to squander your blessing!
When Hotsauce gets paid we sit down and write out checks for things that we can't pay in cash. Our natural gas and electric are normally paid online and our cell phone is paid over the phone. We do this because it doesn't cost us extra, if it did we would pay via check. We have some payments that are automatically withdrawn every month too. For all other things we use cash and tuck them in envelopes. I would love to buy an envelope system from www.daveramsey.com , but I haven't budgeted for them yet! So we've been using regular old white paper envelopes, but for those that I use frequently, I've been frustrated because they rip and fall apart easily. So Hotsauce sat down last night and made me new ones from pages out of a magazine and then used painters' tape over the top of it. Here are two that he made:
Yes, I know! He giggled like a little school girl for at least an hour over the gas one. Of course since he pumps the gas I usually go inside and pay for it. So embarrassing! But, secretly it makes me giggle on the inside, but don't tell him that.
Here's a tip. Have a "blow fund". We don't have an entertainment fund, because right now our entertainment comes out of our blow fund. Our blow fund currently allows each of us to have $25 every 2 weeks. I believe this could be called our "sanity fund". We don't have cable. We don't have a restaurant fund right now either. Our extras come out of the blow fund. This money is spent however you choose. I don't tell Hotsauce how to spend his and I'm not accountable to him in how I spend mine (assuming that it's legal and glorifying to God the other spouse is hands off). You don't have to spend your blow fund each month, you can save it up for something bigger... which is my plan. Or you can nickel and dime it away on Mt. Dew and donuts. No one judges here. ;)
Last thing... remember that if you're married you both have to agree to the budget or it's a no go! I am 100% serious here. You must both be involved and have a voice or it will never work!
***It should be noted (just in case I don't mention it in every other breath) that I am not financial expert, nor do I play one on TV, and that these ideas are from my understanding of Dave Ramsey's book, The Total Money Makeover which you
Anyone else have suggestions for simple budgeting? For those of you who are new to budgeting what things overwhelm you?
Here's what overwhelmed me. For the past year we've used one credit card with a points system for all our purchases. We payoff the balance every week so it's out of the checking account and "accounted" for. In 5 months we've made $160 so I like that :) But I'm finding that trying to change my focus to plan for the month ahead, there's not enough money because I'm using this months money to still pay for purchases from last month. Not sure how to switch gears and still use the points card. (it's always paid off and no interest is ever accrued)
ReplyDeleteRight now I want you to stand up, walk over to your wallet, pull the credit card out and cut it to shreds. Seriously, do it. Right now. Here's why: There are many studies that show that people who use credit cards spend more than people who use cash only. So just by using the credit card your probably spending more than $32 a month then you would by just using cash. So that $160 is already a non-issue. Though it feels good when you get that check! Credit card companies are not your friends. They do not want you to succeed financially. They want you enslaved to debt for the rest of your life. I know that right now you're able to pay it off every month, but what happens if your car breaks down and your water heater breaks in the same month? You'll just put it on the credit card, because it will be "your only option". Soon you can't pay it off every month and now you're in a hole that you can't get out of.
DeleteNow, before you even start on your Emergency Fund you need to get caught up on your bills. Playing catch up is not fun, nor is it easy. If after doing the budget you find that you're still not able to get caught up you will need a new game plan. Since your current income isn't enough you'll have to either cut out non-essentials, like cable and eating out. I've lived 10 years without cable ... you can do it. Or walk around your house and find things that you could sell. Obviously a garage sale comes to mind, but for items that you may want more than a few bucks for you should look into Craig's List or Ebay. If you still don't have enough money to get caught up you may need to get a part-time job.
There's much more I could say on this, but for now I will leave it at this and if you have more questions feel free to ask and I will do my best to answer!
attempt 2 so much better, i realized a put a bill in twice. I also was trying to organize it with paychecks and bills listed by dates and wondered why I didn't have enough the first half of the month. Stopped before I got to the second half of the month which has plenty to cover. the sample on you posted took the dates out of the equation and I see actually have extra each month. Now just to get into the habit of looking at it through out the month so I remember where we stand all month. :)
ReplyDeleteIt had to feel good to discover that you doubled up on the bill! We have a very detailed budget that lists what date the bill is due and out of what paycheck/period we will be taking it out of also. It's confusing and would be hard for me to reproduce through a spreadsheet. But, if you find that you're short one pay period and have a surplus through the other I would suggestion calling some your electric company, credit card company, etc and seeing if you can move the due date. Sometimes if you have it become an automatic withdraw they're even more willing to help you out. Otherwise make sure that you're extra diligent at the end of the month to save for the beginning of the following month.
DeleteWe also have a paper copy of our budget and we highlight each amount that gets paid throughout the month. It's incredibly encouraging to see a paper full of blue highlights!!
Oh and way to stick with it!!!
Deletethe hubs and i sat down last night and went over oct's budget. Felt good to be on the same page. He's always trusted me with where the money goes but said it was nice to see the details. We also agreed where the extra was going to go (not much extra but extra) this is the first month we set a limit on groceries. Any suggestion for frugal shopping tips? Thanks for your support and encouragement. I enjoy reading your journey too!
ReplyDeleteSo excited to hear that you and the Hubs are on the same page! I have always trusted Hotsauce with the money, but until I was really on the same page with where are finances were I couldn't be a help to him!
DeleteMy best tip for frugal shopping is to make a menu out in advance (I do a 2 week menu). Once you've made your menu buy only what you need to make those meals and snacks to get you through the weeks. We have a deep freeze so we even freeze our milk. Having a plan will always save you money, also the more trips you take to store the more money you will spend, both in groceries and in gas.
This question comes up quite a bit so I will post more details in a blog later this week!
I'm also excited to hear how God has made your "not much extra" into a tenfold blessing!