A few followers have asked specifically about budgeting.  I know, I know budgeting can be as much fun as watching paint dry!  Learning how to complete a monthly budget was the single most effective skill that helped my wife and I pay off $46k in student loan debt!  Subsequently knowing how to and sticking to a written budget helps my family invest, save, and know what our income allows us to do or not to do.  We are no experts in budgeting but we have found what works for us!  Like, comment, or send me an email if there is something that works better for you!  I am always interested in making things more efficient.

I was taught to break my budget down to three categories:

1. Fixed
2. Variable
3. Irregular

Fixed: Fixed expenses are any expenses that do not change month to month.  These would include rent/mortgage, utilities, cable, internet, life insurance, student loan, charity etc.

Variable: Variable expenses are any expenses that vary month to month but are a constant throughout the year.  These would include gas, groceries, work meals, eating out, personal care expenditures etc.

Irregular: Irregular expenses are any expenses that are unique to the month being budgeted for.  These would include wedding gifts, birthdays, car repairs etc.

We are followers of Dave Ramsey and he has some good tools, forms, and a free app that you can find HERE!  Dave teaches a zero-based budget.  Basically already having every dollar spoken for, to maximize savings and debt pay off.  Personally, I could never get the hang of a zero-based budget.  I got more motivation every month when we would have a productive month where we stuck to the budget.  During that month we would have extra funds at the end of the month to put towards debt pay off, savings, or investing.  We did take Dave’s advice on completing a WRITTEN budget.

ON PAPER ON PURPOSE BUDGET:  I have done a written budget since 2009, my wife since we got married.  Everything we budget for is on paper on purpose before the month begins.  We simply list out the expenses, separated in one of the above categories.  Once that bill has been paid or all funds used in that expense I simply cross it out.

Example:

Mortgage: $1,200

Verizon: $105

Insurance: $200

Gas: $200 150 100 75 50

At the end of the month we have a set amount as an emergency fund that is carried over to the next month.  Anything above that amount is SAVINGS!  We can now take that money and put it towards debt payoff, savings, or investing!  As simple as that!  YOU ARE NOT DOING A BUDGET IF YOU’RE SIMPLY WRITING DOWN BILLS!  OR WRITING DOWN WHAT YOU SPENT ON VARIABLE EXPENSES AFTER YOU ALREADY SPENT THE MONEY!  Just to be clear 🙂

There are several online free budgeting website/ apps which I wrote about on a previous post you can find HERE!

For example: Below is pictures of our budget book, all that is left to do is fill in the amounts.  Very simple!

Family Budgeting: Being single has it’s perks…(get your mind out of the gutter) budgeting perks!  You are in complete control!  If you have a significant other it can be very, very difficult.  Dave Ramsey does an excellent job of speaking to couples so check his stuff out!  It took a couple of budget fights for me to realize that a family budget is a compromised plan on paper.  Learn from my experience!  I seriously think I married the most frugal woman on the planet, and I still managed to make her mad with a budget!  The story goes something like this…

My wife “overspent” our monies allocated to eating out several years ago by frequenting SUBWAY, the same place that puts two pieces of highly processed lunch meat together on a piece of bread (much like you can do at home for a half or more of the cost)!  While working a night shift I explained this to my wife via a text message.  I didn’t get to see the steam rolling out of her ears but I did get a phone call where I could hear it rolling out.

Wife: Are you near town?

Budget Happy Husband: Yes

Wife: Meet me at McDonald’s, coffee break, 10 minutes.  (click).

You ever get the feeling like someone is about to lay down the law and it’s not you?  I only saw two ways this was going to go.  Allow my wife to lay the law down on me being overbearing about the budget… or call someone for backup, to just so happen show up at McDonald’s so the law couldn’t be laid down!  I chose the latter.  I immediately called one of my best friends, Officer Tyler, who works for the local Police Department and invited him to a quick coffee break at McDonald’s… without telling him the details!

It couldn’t have worked out any better.  I arrived first, my wife pulled in and parked next to me as we both got out.  I could see the short drive did not make her any less angered.  Before we could both take a step, like a good backup officer that comes to save the day, Officer Tyler pulls in!  Before he gets out the exchange went something like this…

Wife: (Through gritting teeth) I AM NOT GOING IN THERE IF HE IS!  DID YOU CALL HIM?

Budget Happy Husband: (only a smirk) 🙂

Wife: Not going in there, I’ll see YOU at home.

Almost simultaneously Officer Tyler gets out his cruiser…

Officer Tyler: Oh Hi Susan (wife), are you coming in for some coffee?

Wife: Hi Tyler…. (long pause) yeah I guess…

HA! My plan worked perfectly she will keep her composure and I will be in the clear at the very least until I get home!  NOPE… WRONG… Once we sat down the budget issues came up and Officer Tyler, who I had called for backup was nothing of the sort.  He completely agreed with my wife and a compromise on the amount of monies we budget for eating out each month was had and I also was “advised” of how to communicate better about budget issues.  Basically my wife and Officer Tyler laid down the law!

LEARN FROM OUR MISTAKES!  Budgeting is a constant work in progress.  Both my wife and I learned that two adults come together at the end of each month and agree to a REALISTIC budget.  Sure we might go over a category or two but we both know when to, when not to, and when to reevaluate from month to month.

If you’re already budgeting each month, awesome!  If you’re not, try it!  I guarantee when you make a budget and stick to it, that first month will feel like you got an instant raise!  Not convinced yet?  Write down a budget of what you think you’re spending, then times it by 12 (for 12 months), add it all up and compare it to your W-2s that you will be getting in the mail soon… wonder where all your money went?  Start using a budget!

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