Simplify Your Life: Through Budgeting
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But the luxuries of being an adult means that you don’t have much of a choice in the matter, so some how, some way you’ve gotta develop a plan to keep your bank account in the black and your savings account padded for those, “You need a new muffler” kind of days.
So what’s the plan? I’ve got some ideas…
- On the top of one page write down your monthly income.
- Make a list of all of your monthly expenses, from groceries and utilities, right down to the trips to Starbucks. *Not exactly sure what you spend? Review the last few months’ bank statements to determine just how much money is going where.
- On another sheet of paper write down the essential expenses, to your family and home. These might include utilities, gas, groceries, phone, mortgage or rent, etc. (LEAVE OFF EXTRAS – ie. eating out and entertainment.)
- Cross reference your lists, making sure you’ve covered everything, and then circle all of the essential items on the monthly expenses list.
- Total up the costs of all of these items; write this number next to the monthly income at the top of your page and circle it.
- Subtract the essential expenses from your monthly income and you have your remaining total of extra income. This is the amount that is allotted to be spent throughout the month on extras such as eating out, entertainment and gifts.
At the beginning of each month, get out enough cash for the full amount of your essential expenses plus the amount you have budgeted for any extra expenses each month. The remainder is then split between checking and savings.
Designate an envelope for each monthly expense + extra expenses. One for groceries, one for the mortgage, one for utilities and so on.
As you go through the month, you are able to pay off exactly what needs to be paid and you won’t find yourself at the end of the month pinching pennies to make ends meet.
Think of it this way, if it’s on a gift card, it’s safe. It can’t be drawn from an ATM on a whim and sometimes that’s all of the deterrence you need from the next big sale at Kohls!
When you’re planning your monthly expenses, simply figure a $25, or $50, or $100 (or however much you are able to and willing to set aside) gift card into your budget. Then at the beginning of each month, purchase a Visa Gift Card for the designated amount and set it aside in a secure location for that rainy day…or emergency expense.
Budgeting Tool
You’ve got to check out May Designs! Oh yea, and did I tell you they’re eco-friendly too?
From journals, to note cards, to custom designs – you’re going to love what May does! Their budget journals (80 page bound journal – only $17.00) are incredible; allowing you to easily lay out how much you are spending and wanting to save each month.
Budgeting Resources
Fitting Your Goals Into Your Budget – Amy at Counting Change Again
52 Week Money Challenge – Raining Hot Coupons
$5 Savings Plan – Mommy Savers
Building A Budget Binder – A Cultivated Nest
Photo Credits: Gift Card / Cash Envelope
   
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