Budget Part 2 -Down the Drain

Is this what you feel like is happening with your money?

I know it's been the case for me more times than I care to admit.  So I'm trying my best to not let this happen anymore.  I've been following a budget designed to eliminate consumer debt and assist me with saving an emergency fund along with funding other savings accounts.

In a previous post I outlined a couple of super simple starting points for taking control of your money:

1. List your expenses

2. Track your spending.

Now as promised I'll cover a couple more points:

3.  List your Net Income  (Take Home Pay)- Be sure to include all sources of income.

4.  Subtract your monthly expenses from your Income.

Do you have enough? If Yes then Yeah for you! (I'd pat you on the back if I could, but I can't so let's just pretend I did.)  If you don't have enough then you need to look at where you can cut or you need to generate more income.  I'll be sure to share more about this in future posts.  If you have extra then you pay more on any debts you have and you can begin savings.  Your right on track.  If you don't have extra and "just make it" then be sure to stay tuned for future posts on cutting back, because you know you need to get rid of that debt and should start saving.

5.  Make some decisions on where/how to cut back.  (I'll give you tips on what I do in a future post.)


6.  Begin to create a year-long monthly budget.  This will help you plan for things that come up throughout the year that we tend to forget about till they're due then we suffer through those months.  For example budget in the months when your car registration is due, budget in for the months when you have birthdays for those in your household (kids & spouse), when your kids have school or sports registration fees, back to school expenditures, Christmas, Mortgage Insurance etc.  That way you won't be hit by surprise with a super tight month. (Nobody likes those kinds of surprises.)
Now I know all this is super basic and simple.  It really is.  The hard part is getting motivated to do it and then remaining committed.  It's gonna take changes and sacrifices.  That's really hard, especially in the beginning.

Your going to have to say "No" sometimes, to yourself, your kids and your spouse.  We don't like saying "No".  Cuz yes is so much funner.  Yes, yes it is.  We like "Yes".  We no like "No".  But the hardest part is in the beginning.  It does get easier and once your on track you'll be able to come up with lifestyle changes that you can live with long term.  That's the ultimate goal.

I'm up for it.  Are you?

Let's keep moving forward.

Warm Wishes,

Elizabeth

Budget Basics

I guess the word of the day is the B word.  "Budget".  Yes it seems like many people from Obama down to little old me and a whole bunch of folks in between are talking "Budget".

The B word can cause a visceral reaction in some.  Stomachs tightens, lips curl and shoulders slump.

This doesn't have to be the case though.

If you learn to take control of your money instead of it controlling you, you can face your budget head on and not even flinch.

People that stick to a budget and plan their purchases, even budgeting in for fun, vacations and stuff, feel good about the B word.  They know it's a tool  A tool that can help them stay out of debt and begin to build savings.

I'm not going to go in depth here and I'm no financial guru but I've learned a few things over the last couple of years and I'm just gonna share what works for me.  (For those of you that have been following a budget and have no issues with debt- Hooray for you! I'm so happy for you!- (I'm clapping right now, you just can't see me)- then you don't need any of these simple guidelines)  For those of you who are interested or may be struggling with this issue read on.

I'll begin by covering a couple basic principals:

1.  Start by finding out what all your expenses and debts are.  You can use a simple spreadsheet or any of a number of programs available for this.  You may have done this before- felt sick and shoved it in a drawer.  If that's the case then do it again.  I list mine beginning with the biggest debt, the mortgage, then I list the next one, for us it's our children's school (it's equal to our mortgage- ouch!)  Then I list the next, going from any credit card debt, food, fixed expenses like cell phone bills or cable, internet services, gas, electricity, water, trash.  You get it.  Just list them.  List every little thing.  Be as precise as possible.  You may need to pull out old statements to do this or if you pay your bills on line (like I do) you can just pull up this info and enter it onto your spreadsheet. Oh, and if you have any unsettled personal debts that you owe to friends or relatives, list those too.  You need a plan.  So many relationships are ruined over unpaid debt- you don't want that.

2.  Track your spending for at least a month.  Save the receipts.  Later you will analyze what it is your buying.  Look at how many times you are going into the stores.  Little trips to Target, Walmart etc. really add up fast. Analyzing your spending will help you later when you are looking for areas that you can cut expenses.  We'll get into this more in a future post.  We'll look at how to control those variable expenses and more importantly how to control ourselves!

Good Luck and Warm Wishes!

Elizabeth