The “B” Word part 1Posted: October 21, 2011
I’m a huge fan of the “B” word. Budgets. I love them and can’t get enough of them. I actually have a budget and a budget2.0 going. And on my budget(s) I have few different side budgets going. Is this sad? I hope not but it probably is. More so when I tell you that I get thrilled doing them. Seriously, it’s a problem. But one I happily accept.
For a “basic”budget:
Grab a pencil and notebook or a computer. Write down everything you spend money on. This can take awhile—a good idea is to do a “prebudget” spending analysis. Jot down every time you spend money—and be honest. Don’t forget to write down that coffee you got at Starbucks or that shirt you picked up on sale–even if they were “one time occurrences”. I divided our spending into categories: rent, groceries, utilities, phone, car insurance, gas, netflix, storage fee, laundry, personal money x2, and a miscellaneous fund. Granted I went a step farther and separated our misc. fund into the following: holiday savings, debt savings, beer, and a true misc. fund—which normally is maybe 10 dollars.
After you’ve got it separated into various categories, look over a few months’ receipts/transactions to make see how much you spend every month. Also, when looking at grocery store receipts try to see if there are any noticeable differences: did you spend $50 more one period/week/whatever because you were hungry? Try to find places to
slim it down. After you have all your debits totaled, total your available income. Subtract the debits from that income and see where you stand. Are you above your means? Below? Barely making even? If you are below your means, congratulations! (I’d still do a budget but that’s me) Otherwise, read on J
After you make you look at your income vs. your expenses, try to see what you can cut out. Are you making a billion Starbuck runs? Do you spend an outlandish amount on restaurants? I like to eat out but we’ve also found we can make a lot of those foods we love at home for cheaper. So instead of eating out every other day, we try to keep our dates to $100 a month–$50 every two weeks.
When you’ve got everything cut that you can, and hopefully you cut enough that you are saving money, designate where that saved money will go. Are you going to pay debt? Are you going to save it? I chose option c (I know, I know—I didn’t give you an option c but it was a trick!) and am doing both. I pick debts that I want to save up to pay off and I designate a good chunk toward savings.
Do you have a budget? How did you go about it? Are you in love with budgets as well?