Sunday, June 22, 2014

The Budget.

I loathe spending money, even if its for something that I have specifically saved. I get this burning sensation in the pit of my stomach- and if its a lot of money (like our Vitamix was), I feel sick to my stomach.
 I keep the receipt for months under a magnet on the refrigerator, and refuse to throw away original packaging just in case I decide to return it.

But sometimes, people need a car, or a house, or an insanely expensive item for school like the crazy things my Mr. needs. We don't make a lot of money, so I cut corners where I can, but we still didn't have enough in savings to make large purchases or cover huge emergencies, if needed.

Where's the Money Going?

I am mathematically challenged, so I had to keep this a basic as possible. To determine where it was all going (and how much I could start setting aside), I started with a basic chart that included every single bill we could possibly have. I assumed nearly all of our money went to bills, groceries, gas, and vehicle maintenance. I don't really actively decorate my home, I'm fashionably challenged so I don't buy a ton of clothes, I try not to drive to save gas, I cook at home, and I don't have payments on anything... So where's the money going?
I even included the credit card that is like a cuss word in our home (seriously, we don't say "credit card" in front of our kids!) and we had a zero balance on. I included the amount due ("cost"), the due date, and the amount paid. The reason I included both the amount due and amount paid was because of the credit card - I typically will add a few dollars onto minimum balances due, to reduce accrued interest in the end. To avoid interest entirely, we only use the credit card when there is no other option.

It All Adds Up

At the end of my chart, I would calculate the total amount of our income that was to be used towards bills. At the time, we got paid on the 1st and 15th of every month. So I then would calculate how much money of our income was due to bills prior to the 15th, and after

I filled in some random numbers and dates for a visual. So, for the first paycheck of the month, only $677.69 is going to be used toward bills. For the second paycheck, only $237.02 will be used. I only pay bills that are due before the 15th with the 1st of the month paycheck. I also only pay bills that are due after the 15th with the 15th of the month paycheck. Does that make sense?

The total amount that went to bills that figurative month was $914.71. That's all? So now that we knew where is going, that means we can figure out how much to put away each paycheck. Remember - you still need to pay for gas and vehicle maintenance, groceries, and have spending cash on top of what you already pay your bills with.

Other Things to Consider

Another money-saving tip I used was asking myself if I really needed something before purchasing it. Would it save me money? Would it improve our life that significantlyAlso, can you borrow it from a friend? Can you find it used? Have you really scoured Craigslist, thrift stores, and yard sales that well? Consider these alternatives to purchasing new items every single time.

Some people like to separate their cash into envelopes for a better visual, but my chart worked well for me, I could just post it on the fridge and mark it as the month went on.

So there you have it, I hope it makes sense to you and helps you if you are looking for it. Do you have any tips or tricks to help you manage your income?

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