You can’t have a happy home if your finances are not in order a good way to do that is by following a budget. One of my new years resolutions was to finally get my families finances in order. We have done okay at budgeting in the past, but we always seem to run into a couple of pit falls here and there. With tax returns coming in soon, I felt now was a good time to finally get a better hold over our budget. We have a really hard time at maintaining a budget when it comes to groceries and then of course we have a couple of small bills we frequently forget about until the day they are do and we are then scavenging for cash. I’m tired of this game of paycheck to paycheck, month to month, week to week, day to day nightmare we seem to be constantly stuck in.
So I wrote all of the bills and monthly expenses down. I also tallied up our monthly income. I then subtracted the regular bills that we know what they are every month. I then budgeted a set amount for those “unexpected,” expenses. We also have a plan for how we are going to begin saving money and how we are going to ultimately fix our credit.
Step one at creating a budget:
Determine your average monthly income. I mean after taxes, do not include un-assured income like tips, and side gigs. Any extra income you get like tips and side gigs should be either put towards savings or debt.
Step two at creating a budget:
Write down all of your monthly bills. I mean everything rent, water, electric, insurance, internet, phone, gas (for your home and car), food, entertainment like netflix or cable. (Speaking of which get rid of cable you do not need it.) If you have to go to a laundry mat to do your laundry like we do include that bill to, if you dry clean anything regularly include that bill.
Step three at creating a budget:
Allocate the funds from each paycheck. In fact you are better off cutting every bill in half and paying for half of it with each paycheck if you can. If you can’t currently do that because you are behind, and you are expecting a tax refund this year I highly recommend using some of it so you can start doing just that. This way when you pay rent, you are not automatically broke, you still have enough money to buy food and put gas in the car.
Step four at creating a budget:
Put the money you have allocated for things like gas, food, and fun into three separate envelopes, instead of charging it to the card, this way you know exactly how much you have to spend and you do not accidentally overspend. After you have paid all bills, whatever is left over throw into a savings account. If you allocate a certain amount of money for savings every month (as everyone should) set it up like a monthly bill so that it is automatically transferred over when you receive your paycheck.
Step five at creating a budget:
If you can manage to set it up so you are paying half of every bill twice a month, set it up online so that the money automatically transfers from your bank account to the company. This process is called automatic bill pay and can be found on your online banking accounts main page. By setting up automatic bill pay you can assure that no bills are ever forgotten again.
How do you do your monthly budget? Please share in the comments what you thought about my monthly budgeting ideas.