Ok, so here’s some harsh reality about me. I hate budgets and I’m a big over spender! I would think with my background that I would be really good at living frugally since my grandparents and parents had too. But I suppose I went the other direction and now I’m really kicking myself in the butt. My parents made sure that I knew you had to work for money and how to balance my checkbook. Too bad though that I didn’t get many lessons on saving or even investing. Well, I’ve decided to take back the financial control and have put my family on a tight budget, especially since I’m no longer working outside of the home.
I’ve had some help throughout the years on working with a budget. I’ve never really stuck with it but at least I knew where to start. I did however get really motivated after reading Dave Ramsey’s “Total Money Makeover”. You can find a copy of it here on Amazon. It went over a few topics that I already knew about but it introduced me to a few ideas that were new to me. I would highly recommend this book to anyone who is curious on money management. But here’s a quick review of my budget. (You can click on the picture for a better view.)
I took one of the budgets that was worked up for me at a workshop and did some editing. I have all the deposits at the tops. I put in a place for additional deposits that we may get such as bonuses and taxes. I have formulas throughout the spreadsheet so all of my calculations are done for me. Since we get paid twice a month, I decided to break our budget down to those paychecks. This helps me keep better track of what bills are due on what check and my grocery & gas expenses. Now, I don’t put money aside every month for yearly expenses such as car tags and Christmas shopping. I’m usually putting quite a bit of extra money on payments so when something arises, I just take some money from another payment. It’s just what has always worked for me. (For Christmas shopping, I add in a budget line from October to December. I will then allot a certain amount of money for Christmas and by spreading it over a few months makes it easier to manage.)
You will also notice that I have a projected and actual spending column for each pay period. When I made this budget, I was able to go back to my bill journal and see what our utility expenses were in the previous years. This allowed me to get a good estimate on what we would be looking at this year. At the end of the month, I can compare what I projected to spend versus what I actually spent to see where I need to make adjustments.
In the Personal section, you will see that I do allot us an allowance. This may seem weird, but this little amount helps keep us on track. We each get a certain amount of money that we get to spend any way we want with no questions asked. We also know that when that money is gone then it’s gone. It definitely keeps my impulse shopping in check. I also budget a little bit of money for meals out as a family. It’s usually enough for one nice sit down dinner or a few runs at a drive through. It all depends on what we’re in the mood for.
Now for the highlighted portion above. The numbers in the first column is the order in which I plan on paying off our debts. There are usually two options when planning out your snowball effect plan. Most people pay off their debts in order of their highest interest rates. I did this for a long time. I was told at one of my first budgeting workshops that paying off debt that way was the most beneficial because you would save hundreds of dollars in interest payments. Sounds logically, right? Well, I failed many times when I attempted my budget this way, until I read Dave Ramsey’s book. Remember me mentioning that earlier?? This is why I was failing, it can take longer to pay off the higher interest debts and then you (I) will lose your motivation. You keep slugging away and you seem to get nowhere fast. Now, I pay off our smaller balances first. This helps the motivation because you can start crossing off items from your budget earlier. If you keep seeing results, you’ll stay motivated.
In my second column you’ll see that I do keep track of out interest rates. I do this mainly to keep track of rate increases, or if I have two similar balances then I would choose the debt with the higher rate. The third column is the balance that we owe as of that month. You can’t see it in the shot, but I do have the balances added at the bottom. I originally had them together as one subtotal, but as of last night I added in subcategory totals (mortgage, student loans, vehicles, etc.). This is just a way for me to get a quick snap shot of what we owe and where.
Quick Budget Tips
- Start simple. Don’t get overly fancy or make it too difficult for yourself.
- Make sure you budget yourself some allowance or free money. You are more likely to slip up if you are TOO restrictive.
- Remember that budgets are not written in stone. Review your previous months and make changes as necessary.
- Cut up your credit cards or put them in a locked safe. GET THEM OUT OF YOUR WALLET. You can’t use it while your out shopping if it’s locked up at home.
This is my “quick” budget review and I can go into even more detail in another blog post if you would like. Just let me know in the comments below. I hope you found something helpful here and if you have any suggestions on how I can improve my budget then I would love to hear from you!!