Got Budget?
Hey there Smart Moms!
How often do you find yourself wishing you had a little extra dough to fun things with your family, but are just not finding the cash to swing it?
Or maybe you just want to go buy a new couch?
You can’t seem to afford groceries this month?
You’ve been working towards buying a new home but can’t make enough to get out of your apartment?
If any of these sound like you, trust me, you are not alone! When I was first married, I thought it would be an eternity until I could afford my own home. I kept dreaming about the house I wanted to buy, all the furnishings I would pick out, the decorations I would hang or accent each room with.
But all that seemed so far out of reach.
One night I had a conversation with my husband, where we discussed all of our future goals, our dreams, our idea of our lives for the next 5, 10, 30 years.
Obviously in that vision, we had our own house. So we had to figure out how to achieve homeownership.
Together, we decided that the best first step to saving money was to budget. As mentioned in another post, I took a finance class in college, which came in handy when my husband and I did our budget together.
And that’s what I’m going to teach you today. While I don’t have a PhD, I do have life experience, so consider this your free, crash course in budgeting–so you don’t make the same mistakes as me!
First, determine your monthly income–combined if you have more than one income earner in the house. This should be easy if you have consistent paychecks and no additional overtime. My husband and I just added up all our paychecks for the month. If you have irregular income, this is enough to create headaches on its own.
If you have irregular income then write down your minimum amount of income this month. This is the amount that you’re very sure you will be making this month.
Example: If you work from home doing data entry and you make anywhere from $1,000- $2,500 every month. Write down $1,000.
I have found it to be most useful to budget after taxes, because then you are already “budgeting” for important things like retirement.
Next, TRACK YOUR SPENDING! I want you to go to Excel right now and create a spreadsheet for every expense. Include every bill, and don’t forget the smaller ones like gym memberships, gas, and I have an allowance for my kids that I include. Any regular output of money. My suggestion is to take 3 months and make a note of how much (or an average for necessities like groceries,) you are spending each month. Likewise, you can track your exact paycheck amount that is coming in so you know how much you have to work with.
If you prefer an app (as many users do,) I found this handy article that lists a few budgeting app favorites: http://www.busybudgeter.com/how-to-find-the-best-budget-app-to-track-your-budget/
Whatever tool you use to track, after those 3 months, you should have the most accurate numbers to work with.
I suggest utilizing the 3 months of tracking because the first time I did this, I made the budget based off my income and a general guess of how much I was spending each month. The numbers were not adding up and I was spending more than my income provided. After some frustration, I wrote down each bill and expense exactly for the amount I was spending, and was able to create a more accurate budget, keeping all my columns green! (Ie. not spending beyond my means.)
After deducing your income and calculating your expenses, you can plan for the rest of your money.
My husband and I keep a list of goals. Trips we want to take our kids on, new cars, additions onto the house, etc.
We also have a column for fun! Taking the kids to the pool, ice cream trips, fancy dinners for special occasions. It’s important to make sure you are spending your money wisely and avoiding debt at all costs, but if you have the extra, definitely go have fun! Because life is about so much more than having money in the bank. Just spending wisely!
If you are barely having enough in your account each month to pay your bills, however, a wise move is to find substitutions(2). If you pay for cable every month, switch it for Netflix! Or cancel it altogether and just spend time talking or playing games. That’s my preferred alternative.
Go to the library instead of buying books.
Look into new phone plans.
Call and see if you can negotiate a bill to a lower rate.
There are a myriad of options you can investigate to trim your expenses around the edges.
Finally, the last thing I want to drive home is to stay up to date with your budget! Sometimes bills can fluctuate. Maybe your paycheck was smaller than anticipated. There are so many contributing factors to your budget. If you neglect it for just a few months, it can greatly impact your finances.
1. http://www.busybudgeter.com/how-to-find-the-best-budget-app-to-track-your-budget/
