There has been a lot of hype up to this post, but it is finally here! Today I will walk you through the actual writing of your budget. If you follow this 100%, then you will hit your money goals EVERY time! The system Cole and I use was developed by Dave Ramsey, and it has been our saving grace with money! Let's jump right in:
1. Determine the time-frame your would like your budget to be for- We have one budget for ever two weeks (because that is when Cole's paychecks come in), but some people might get paid every week, or once a month.
2. At the top of a sheet of paper, or a spreadsheet (you can get a fancy as you want), write down the amount of your check(s), and all other money that comes into your household (we even count when we turn in our change, and recycling money).
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| Pic: Make the List |
4. Under these categories, write in subcategories for each. Our personal subcategories are pictured below, but keep in mind these should not be the exact same as yous (unless you really want to give Cole some pocket money, in that case I am sure we can work something out!). Some of you might have children that you need to buy sports stuff for, or pay for daycare. Others might have multiple car payments, and most of you will probably have a decent amount of utilities to pay for (electricity, water, gas, trash, cable, internet etc.)
5. Record all of the amounts that you HAVE to pay for each of these categories during your pay period. Keep in mind that you will need to break these categories down into two separate budgets if you wish to do a bi-weekly budget like we do. The amounts should be the MINIMUM payments (you can add more money to a credit card or whatever after you set up your initial budget). Also, if you pay something like your insurance every couple months, or once a year, you will need to break down those payments into monthly savings. For example: If my life insurance is paid once every six months, and the premium is $600, then I will save $100 per month, or $50 per paycheck, so I am ready to pay the bill when it comes due.
6. Add up all the subcategories so you have an amount for each category, then total up all the categories to get your budget's total.
7. Subtract your budget's total from your income at the top of the page, and you will get the amount that you have left to work with. I urge you to put this money to good use, because if you do not, that money will do a disappearing act faster than you can imagine! Put that money towards paying down some extra debt, put it in a savings account for your kids college, or that new motorcycle (Cole!). DO SOMETHING with it, or you will look back and not know where it went, I can promise you that!
8. It is safe to say that if you are married, you wrote this budget and your spouse knows very little about it. You MUST share the budget with your spouse! You MUST agree upon the budget BEFORE it is implemented. If you do not have a spouse, it is important that you decide on what Cole would call an "accountabili-buddy." It is very easy to stray from the budget if you do not have anyone to hold you accountable. This can be a parent, a boyfriend/girlfriend, or just a really great friend that will be honest with you! Obviously this has to be someone you trust, because you will be sharing very personal, financial information with them.
9. Stick to it! It will seem hard at first, and you will probably have to change things quite a bit in the beginning (again, with your spouses knowledge), but after a couple months of doing this, it will become like second nature, and you will have a sense of peace that others will envy! However, for this to work you MUST stick to your written budget. Under no circumstances should you stray from this budget, it is LAW! If something you just can't put off until your next paycheck comes up, and you need to change the budget, you have to talk to you spouse or your "accountabili-buddy" and BOTH of you must agree upon it before anything is changed.
Cole and I would love to answer any questions and/or review any comments that you have! Leave a comment or email us at m.myselfinc@yahoo.com.
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