My husband and I are budget connoisseurs. We try out budget forms like a bunch of wild single ladies at a wine tasting. In the past I've tried out Mint.com, my own terrible Excel monstrosity, one of Dave's forms from his book, and good old pen and paper.
I'm a bit sick like that. I actually kind of LIKE putting together the budget. It makes absolutely NO sense since I detest math (I actually still count on my fingers at times. Guilty.) But I like neat and orderly lines on paper. I like organization. I like when things WORK.
The budget is integral to any debt repayment plan. If you're not going to live by a budget you might as well forget it.
To so many budget = no fun. Great, that means I get no money. I can't go anywhere. I can't DO anything because of that stupid !#$&@ budget.
Au contraire mon frare. Your budget sets you free. Your budget is you telling your money what to do, thereby freeing you up to spend without guilt.
We utilize what's known as a "zero based budget", which means every single dollar we bring into our home has a "job" until we are down to zero. With every cent we make, we assign it to something: a bill, an envelope (more on those later), or debt repayment. Whatever is leftover at the end of the month goes right to debt repayment (or, if you are debt free, to emergency fund or investing).
Because we don't use credit cards, our "variable" spending (things like gas, food, clothes, whatever) is cash. We use The Envelope System to break our budgeted cash up for these items. I'll go more into depth on envelopes in a later blog, because it deserves it own definitely, but suffice it to say cash is a hell of a lot harder to spend than credit.
As for our mode of budgeting? Lately we've been really liking EveryDollar.com. We use the free version (because free.) but you can also link it to your bank account and get the more intuitive pay version. But, the free version is just fine and dandy and for someone who sucks at math, like I do, it's nice to have a program that will do all that math for you.
"So, Pudgy Gazelle, where do we start?" You may be asking yourself. If you have never done a budget before....never sat down and had a budget meeting with your spouse (my husband and I call it "Doing Dave".....we really really REALLY need to come up with a new phrase for it)....than what you really need to do is just pull that Band-Aid off and DO it.
EASY STEP by STEP FIRST BUDGET:
1. Sit down with a paper, a pen, and your spouse (if you have one). If your spouse is not on board with having a budget....well, that's a blog for a time in the future so stay tuned. It's still probably worthwhile to at least attempt to SHOW them where your money is going. Who knows, seeing the numbers may smack 'em around a bit.
2. At the top of the paper, write your monthly income. Now, a LOT of my friends are self-employed like I am and have variable income. This is where EveryDollar.com is pretty awesome because it allows you to add income as it arrives. Because my income is so variable, we have twice monthly budget meetings.
3. Now, write down ALL of your bills/debits. Start with the fixed debits (those are the ones that don't change month to month). This could be your mortgage, car payment, tuition, whatever. Then write out your variable debits: utility bill, other stuff that can vary from month to month. Lastly, write out what you are going to need in CASH! Good, cold, hard cash. This varies for everyone, but we do: gas, food, pet, clothing and gifts, household, hair, and fun/free spend. Based on your income, the amount taken out for your CASH will vary. This is where you may have to tighten the reigns to win.
4. Whatever is left over? Throw it at your smallest debt (more on the debt snowball later), your emergency fund, or into investing.
See. Not that scary. Every month you agree on the budget and what it says and you live and die by it. No one gets to go to Target and spend $200 and then hide the packages in the closet. This is an agreement. A covenant. The budget means business.
In the coming days/weeks I will be delving further into the idea of a cash only spending existence (it's not that big of a pain in the ass, I promise), how to budget when your income is insanely variable (like mine), and how to get your spouse on board with the budget.
I'd like to take a second also to thank EVERYONE who came on over and checked out The Pudgy Gazelle when I launched yesterday. The feedback has been great so far and the visit #'s are really humbling! I love this little project and I hope it can help folks!