When my husband and I were dating and newly married we had all the time in the world, and enough money to do what we needed…including eating out. Dinner out was like…our love language. We got to catch up with each other over a meal, didn’t have to cook it or clean up after it – done and done. One of our favorite spots was the Orenco Station Grill; it had good food, a fun atmosphere, and was close to home. It was not however, cheap. At the time, I was sort of starting to create a budget
It had us putting our leftover money into savings to try to build a little nest egg, but what I kept finding was that I’d put X amount of money into savings, then got our credit card statement and had to take most of that money back out to pay off our credit card statement. We were treading water, never really leaving much into that savings account. It was soon after that, that I started really understanding budgeting and telling our money what to do, before it told me what to do at the end of each month.
Okay, you’re with me – you’re on board with understanding that you probably should start budgeting. Excuses over. I’m so proud of you!
Deep breath. You can do this!
You’ve already done two of the critical first two steps – dreamt about what you wanted, and wrote down your goals before preparing your head and heart for change. You’re on your way.
Make a plan!
Write down your income. All of it. When does it come in? Is it always the same? What’s the minimum? Do you get any bonuses?
Write down all of your expenses. Take a look back at your past bank statements, credit card bills, etc. What are your recurring charges?
Start with your housing expenses – mortgage or rent, home insurance, utilities, etc. Then move on to auto expenses, and then top it off with your lifestyle expenses – daycare, self-care, groceries, entertainment, etc. Write it all down. Add in your debt payments. Don’t forget to include any savings contributions, retirement, college, etc. that you have as well.
First question.
Do you have enough incoming to cover the outgoing? If not, you likely need to trim some of your expenses.
Second question.
If you do have more incoming than outgoing then what are you doing with your extra? Make a plan for it. Ensure that your emergency savings fund is initially started, then go about throwing that extra toward your debt. No debt? Fill up your emergency savings with 3-6 months of expenses.
Put all of these numbers on paper. Make a monthly plan for all of the income you having coming in – every single dollar. Label it.
Sample Budget:
| Income 1 | $5,000 |
| Income 2 | $3,000 |
| INCOME TOTAL | $8,000 |
| Mortgage | $2,000 |
| Utilities | $500 |
| Phone/Cable | $200 |
| Gas | $200 |
| Insurance | $100 |
| Groceries | $400 |
| Self-Care | $200 |
| Kids | $200 |
| Clothing | $300 |
| Gifts | $100 |
| Pocket Cash | $250 |
| Family Fun | $250 |
| Christmas Save | $100 |
| Vacation Save | $200 |
| Car Payment | $500 |
| Student Loan | $150 |
| EXPENSES TOTAL | $5,650 |
Income – Expenses = Remaining Amount
$8,000 – $5,650 = $2,350
Take that remaining amount, the $2,350 and first make sure that there aren’t any other items going to crop up this month that won’t be covered in your typical amounts. Make adjustments.
Assuming that you have a small emergency savings account of $1,000 already established – it’s now time to be intentional with that extra. Now, throw all that remains towards your smallest debt balance. If your student loan only has $5,000 left on it – send that extra $2,350 there. Boom.
And there you have a basic budgeting concept. Granted, my numbers are ‘even’, the income is decent, and I have few categories of expenses – but the concept can be applied over all ranges of incomes and variety of expenses. Now, give it a try!
If you’d like a basic budgeting template, shoot me an email and I’ll send one your way – straight from Dave Ramsey himself. It’s one of the tools shared with me in my Financial Coach Master Training.
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