Let's start with the basics. Start by writing down all your expenses. Every. Last. One. Have to have coffee at a coffee shop every morning? It gets written on that page too. Add it up.
Bet you're wondering where all that extra money goes, aren't you? I'll bet that your monthly budget says that you should have more money leftover than you usually do. Ours did. If you want a huge shock, look at last months bank statement and put everything into a category. When I did that, I found that we spent over $800 at Walmart! What exactly could we possibly spend $800 on at Walmart?!?
Once you have your list of expenses, put them in order. Start with your basics; mortgage/rent, utilities, vehicle (gas and repairs), food. These are at the top of the list because if something went horribly wrong, you take care of this first. Your credit card companies will survive if you can't make the payment, but you and your family need food. Next, you want to list all the rest of your expenses, listing your debts last. Here's what my list looks like:
Mortgage
Electric
Water/Garbage
Internet
Phone
Netflix (I have that here since it's kinda a utility-we don't have cable)
Car insurance
Groceries/household***
Fuel***
Diapers (definitely a necessity in our house!)***
Hubby's cigarette fund (yep, Marlboro gets it's own category-I'll explain my thought process about this one more later)***
Doctor (a category that you could use as a fund to build for when you need it or just paying as you go)
Medications
Day care
Student loan
Car payment (This could go up with car insurance, but I chose to have all our debts here together)
Car payment (This could go up with car insurance, but I chose to have all our debts here together)
Another student loan
Hospital/clinic bills
Credit cards
More student loans
***Starred items are categories you want to use cash for. Have separate envelopes for each category. If you have money left over at the end of the pay period, you can carry it over to the next pay period.
I put everything else in a misc. category at the bottom. Since we are on such a tight budget right now, I just put things in as we need them. We don't have the luxury of saving money each paycheck for future purchases such as a different car, new furniture, auto repairs, etc. We have to adjust as those things come up. It is a good idea to put aside money each month for Christmas, furniture, car repairs, or anything else you might be saving for. It's amazing how easy it is for Christmas to sneak up on you if you're not careful!
Make sure you have a "blow" category for money to just blow on whatever you want. That's where hubby's cigarettes come in. You and your spouse need to be on the same page with the budget. It won't work if you don't agree on what should be spent where. So, we have a category for cigarettes even though I don't smoke. Hubby wants to smoke. He isn't ready to quit. So, he gets money every pay period to smoke. That's his blow money. If I want to blow money on something, we just work it into the budget. It works great.
It's very hard to come up with a budget for food. I budget $200 every 2 weeks for groceries and household/personal items. That's a pretty good estimate for a family of 4. I had this amount budgeted even before starting to coupon. The only way I'm able to do this is because I meal plan. I do a menu for 2 weeks at a time and go to the grocery store with a list and rarely stray from the list. There are the typical household/personal things I forget to put on the list or great deals that I have a coupon for and could use in a few weeks, but for the most part, I stick to the list. You can do it one of 2 ways. Either spend the way you usually spend for a month, but keep track of every receipt. Add them at the end of the month. There's your budget. The other way is to look at what you spent last month on groceries and make a budget from that. I honestly don't remember what way we did it. The first time you budget and/or meal plan, go through your cupboards. You probably have a bunch of pasta or rice up there that you could use. The first time I went grocery shopping after starting to meal plan I spent $27 and had a full 2 weeks worth of meals and that was without couponing!
You need to decide if you want to have your budget on paper or on the computer. I started on paper just until I got everything set up and figured out. I'm very computer oriented and it bugs me to have a bunch of things crossed out or erased on paper. I personally use Google Docs for my budget. I have it figured out how to put the formulas in so I make the changes in amounts for income and expenses and the spreadsheet does the math for me. It's entirely too easy. Plus, I like that I can do hypothetical situations and see what would happen if we would put extra money towards different bills.
The first few cycles of your budget are going to be tough. You'll go through 10 different ways to write things down. Your grocery budget will go up. Your fuel budget will go down. Adjust your budget as you need to. DON'T GIVE UP! The hardest part is setting things up and sticking with the budget. Once it's flowing nicely, it will pretty much do itself.
Extra money? Well, you need to balance every budget to $0. That means you need to spend the extra money, most ideally paying extra towards bills. I personally choose to pay extra money towards bills or if I know that money will be a little tighter next pay period, I'll carry the money over to next pay period.
This is how to get started. If you have specific questions make sure you ask and I'll try to help, chances are that if you have a question, someone else has the same question!
As with anything on this blog, this is just my way of doing things. Take the things that work for you,
disregard that things that don't, and make your own system.
I put everything else in a misc. category at the bottom. Since we are on such a tight budget right now, I just put things in as we need them. We don't have the luxury of saving money each paycheck for future purchases such as a different car, new furniture, auto repairs, etc. We have to adjust as those things come up. It is a good idea to put aside money each month for Christmas, furniture, car repairs, or anything else you might be saving for. It's amazing how easy it is for Christmas to sneak up on you if you're not careful!
Make sure you have a "blow" category for money to just blow on whatever you want. That's where hubby's cigarettes come in. You and your spouse need to be on the same page with the budget. It won't work if you don't agree on what should be spent where. So, we have a category for cigarettes even though I don't smoke. Hubby wants to smoke. He isn't ready to quit. So, he gets money every pay period to smoke. That's his blow money. If I want to blow money on something, we just work it into the budget. It works great.
It's very hard to come up with a budget for food. I budget $200 every 2 weeks for groceries and household/personal items. That's a pretty good estimate for a family of 4. I had this amount budgeted even before starting to coupon. The only way I'm able to do this is because I meal plan. I do a menu for 2 weeks at a time and go to the grocery store with a list and rarely stray from the list. There are the typical household/personal things I forget to put on the list or great deals that I have a coupon for and could use in a few weeks, but for the most part, I stick to the list. You can do it one of 2 ways. Either spend the way you usually spend for a month, but keep track of every receipt. Add them at the end of the month. There's your budget. The other way is to look at what you spent last month on groceries and make a budget from that. I honestly don't remember what way we did it. The first time you budget and/or meal plan, go through your cupboards. You probably have a bunch of pasta or rice up there that you could use. The first time I went grocery shopping after starting to meal plan I spent $27 and had a full 2 weeks worth of meals and that was without couponing!
You need to decide if you want to have your budget on paper or on the computer. I started on paper just until I got everything set up and figured out. I'm very computer oriented and it bugs me to have a bunch of things crossed out or erased on paper. I personally use Google Docs for my budget. I have it figured out how to put the formulas in so I make the changes in amounts for income and expenses and the spreadsheet does the math for me. It's entirely too easy. Plus, I like that I can do hypothetical situations and see what would happen if we would put extra money towards different bills.
The first few cycles of your budget are going to be tough. You'll go through 10 different ways to write things down. Your grocery budget will go up. Your fuel budget will go down. Adjust your budget as you need to. DON'T GIVE UP! The hardest part is setting things up and sticking with the budget. Once it's flowing nicely, it will pretty much do itself.
Extra money? Well, you need to balance every budget to $0. That means you need to spend the extra money, most ideally paying extra towards bills. I personally choose to pay extra money towards bills or if I know that money will be a little tighter next pay period, I'll carry the money over to next pay period.
This is how to get started. If you have specific questions make sure you ask and I'll try to help, chances are that if you have a question, someone else has the same question!
As with anything on this blog, this is just my way of doing things. Take the things that work for you,
disregard that things that don't, and make your own system.
Very nice and helpful Christina. Glad I do at least some of that already! The meal plan really helps! For me, I print out a month calendar just for meals, the go through the cupboards and freezer to see what I have. I can fill in the blanks each week when the sales flier comes out.
ReplyDeleteSuper fast tip: I keep a freezer inventory list on the outside of the chest freezer so I don't have to dig inside to see what's all in there, or how long it has been in there. It gets updated monthly or whenever the rest of the page is used up by getting things added.