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budgeting

Money

The May Budget Breakdown

April 29, 2015

Howdy.

Here we are again. Time for some good ole budget accountability and fun!

In these posts we will write-up typical expenses that may get overlooked for the particular month. Then we have a photo link up portion where YOU can upload a photo of your budget committee meeting for the month!

So, what expenses might you expect in the month of May?

  • Mother’s Day (I can’t believe we FINALLY get to budget for this!!!) 🙂
    • Brunch
    • Flowers
    • Gifts
    • Crafts
    • Etc.
  • Cinco de Mayo Party
  • Spring Cleaning Supplies
    • Mop, Broom, Vacuum
    • Organizational boxes
    • Filing Cabinet
  • Birthday gifts
  • Wedding gifts
  • Graduation gifts
  • Summer travel
    • Extra gas money
    • Flights
    • Rental car
    • Hotels
  • Memorial Day
    • Party with friends
    • Grilling supplies
    • Wreath’s for graves of Veterans
  • Animal expenses
    • Flea/Tick medications for animals you plan to take out into the woods/hikes
  • Summer supplies
    • Bathing suits
    • Sunglasses
    • Sunscreen
  • Entertainment
    • Entry fees for fun races (Rugged Maniac)
    • Blockbuster movies (Avengers)
  • Yard supplies
    • Gasoline for mower
    • Landscaping
  • Utilities increase
    • Air conditioning
    • Fans
  • Summer Recreation
    • Hiking Supplies
    • Camping Supplies
    • Swimming pool pass
    • State Parks pass

Again, these are some expenses we’ve found ourselves budgeting for this month, so they might be applicable to you or not. Some of these expenses are best budgeted for as a sinking fund...like vacations or gifts. About this time of the year we have to book a lot of travel for the summer months and it’s helpful if several months of flight expenses don’t hit all at once in the same month.

Now it’s time for your part!

[inlinkz_linkup id=520737 mode=1]

Money

The April Budget Breakdown

March 31, 2015

Well hello again.

It”s yet again time for some good ole budget accountability and fun!

Again, in these posts we will write-up typical expenses that may get overlooked for the particular month. Then we have a photo link up portion where YOU can upload a photo of your budget committee meeting for the month!

So, what expenses might you expect in the month of April?

  • EASTER!!
    • Festive Meal
    • Party
    • Gifts for family/friends/children/people becoming Catholic
    • Easter Egg hunts
    • Travel
    • Fun activities for the octave
  • March Madness
    • Championship game party/outing
  • Spring Cleaning Supplies
    • Mop, Broom, Vacuum
    • Organizational boxes
    • Filing Cabinet
  • Vehicle Maintenance
    • Car Washes or supplies
    • Oil change
    • Windshield Wipers
  • Expenses Related to Taxes
    • Accountant/CPA
    • Turbo Tax, etc.
    • E-Filing Fees
  • Birthday gifts
  • Wedding gifts
  • Summer vacation/wedding flights

Again, these are some expenses we’ve found ourselves budgeting for this month, so they might be applicable to you or not. Some of these expenses are best budgeted for as a sinking fund...like birthday and wedding gifts. We tend to get slammed with Wedding gift expenses during the summer months and it’s so much easier if we put away a certain amount monthly for that time.

We are excited to have travel to Nebraska in our budget this month to see a friend enter the Catholic faith!! We haven’t spent Easter with family in almost 8 years so it will be really nice to be around them. We also have the last of our adoption expenses this month before Josie’s finalization in May! 🙂

Now it’s time for your part!

[inlinkz_linkup id=511525 mode=1]

Intentional Living, Money

How To Make a Budget

January 26, 2015

In the past we’ve discussed why you need a budget.

We’ve also discussed how to derail your budget.

But we have not discussed HOW to make a budget. Probably should have done that first.

Whoops.

Here we are though, getting back on track and here to provide you with the practical tips on how to create a budget. This will be especially helpful if you are new to the world of budgeting or if you are trying to budget but end up confused and unable to keep up with it. I plan to post a lot of links to Dave Ramsey articles on this subject so you have more resources for motivation and inspiration.

So, how do you make a budget?

1. Income

First things first, you need to know your income so you can allocate it properly.

This includes things like paychecks, freelance work, child support, interest, birthday or holiday money, and side jobs. Any money that comes TO you is part of your monthly income to budget. It might be irregular and that is OK. It may be slightly trickier for you to gather up and predict your monthly income but it won’t be harder when it comes to the actual budgeting process.

Some of you get paid twice a month and will create a budget twice a month. Or however often you get paid you will make a budget for that payroll period until the next one.

For us, we only wanted to create a budget once a month. We simply combine paychecks from the 15th of the prior month with the paycheck on the 1st of the current month to create our new monthly budget. That way we have a month worth of income to meet a month worth of expenses.

2. Outflow

The next part is to know what your actual expenses are.

Who do you pay every month? How much is your rent? What do you have set up on auto withdraw you aren’t even aware of? Basically, where are you spending your money?

Knowing how and where you spend your money is vital to creating a budget since you know where you need to allocate funds.

 3. Get a Head Start

In order to walk into February with a complete budget, you need to do some advance preparation. The last thing you want is to have an incomplete budget and to spend money un-tracked for several days before you get down to budgeting for the month. It derails the budget and defeats your overall goal.

For example, we are going to host a new budget link-up for the month of February. All you cool cats who create a February budget will have a chance to photograph your budgeting in action and upload it to our blog for accountability. Cool huh?

BUT in order to join in the fun, you will likely need to have spent time working your budget a few days in advance.

4. Host a Budget Committee Meeting

If you’re single, you are the only one who needs to be in attendance for this meeting. If you’re married, BOTH spouses must be present to agree on the written game-plan for the month.

To save time, I typically prepare the budget for what I think looks about right for the month. Then Jonathan and I have our meeting. We go over the budget together and he has the freedom to ask questions, insert changes, or propose a reallocation of funds. Then at the end of the meeting we review everything once more and verbally agree to it.

5. Zero-Based

This is the part I think people get confused about.

Many people feel successful if they budget out the month and then have extra left over. That means the budget wasn’t zero-based.

Zero-based budgeting means every dollar has a job. You want to assign all your money into a category, so that at the end of budgeting, you have no money left to allocate anywhere. It’s either working for you in savings, gas, groceries, tithe, etc. Money that doesn’t get a job will blow out of your hands fast!

This is where you want to have a budgeting tool for help as you create the zero-based budget. The most important things get funded first – food, lights, water, shelter, and basic transportation. Then you work your way down the list assigning money to various categories in the budget until you reach zero.

Whatever Baby Step you’re on will impact how you budget dramatically. Are you in the first two steps? Then your budget will be pretty bare bones and your goal is to get that “debt snowball” category as fat as possible. Perhaps you are in the middle baby steps, so you will likely be saving a lot of your monthly income and the reins will be looser in lifestyle categories. Or maybe you’re in Baby Step 7!! At that point you can do whatever you want with your budget since you literally owe no money to anyone, not even on your house.

6. Staying On Budget

This is where your budget will sink or swim.

You have to consult your budget and track your spending throughout the month. You can’t just create a pie in the sky budget on the first of the month and then let all hell break loose. You have to steer the ship or your lack thereof will steer you into financial ruin and perpetual disorganization.

Dave Ramsey has some simple tools to help with this. There are like a million budgeting apps you can download. We use YNAB – You Need a Budget and are absolutely in love with it. Budgeting has literally never been easier for us but we went months in our early days of doing pen and paper tracking with cash envelopes to build discipline into ourselves.

7. Roll With the Punches

In your first few budgets, you will learn that you grossly underfunded particular categories and overfunded others.

This is OK.

You have the ability to rework the budget during the month if that’s what needs to happen. You can assess that you won’t be using as much money over in gas for example so you can shift the extra over to groceries or the forgotten birthday gift for your brother.

Just don’t make a habit of this. Over time you should be getting better at making a budget so that eventually you will need to readjust next to never since you are a master at knowing your expenses and what you spend in particular months.

There you have it, friends. Some tips, tricks, and pointers on HOW to get budgeting!

Join us here at True Good and Beautiful at the beginning of February for our NEW budget link up!

Happy budgeting! 🙂

 


Photo for this post CC-BY-2.0 Jacob Edward. Filter, title, and logo added.

Money

6 Ways To Keep The Holidays From Ruining Your Financial Life

December 5, 2014

Most of us have gotten swept up into Holiday fever and blitzed our budgets in the process. All it takes is one well-played “Jingle Bell Rock” at the mall…and the next thing you know we are shopping zombies with an off-budget Pumpkin Spice Latte in one hand and six bags of off-budget purchases in the other.

Scary. Stuff.

What are we to do? How do we survive the Holiday season with an intact budget?

Today I want to share with you 6 ways to keep this year’s Holiday season from ruining your finances.

Budget!

First things first…you need a budget before you head into the deep end. Think of it as your life saver. The budget will give you freedom to set expenses aside for Holiday spending (gifts, travel, parties, and clothing) but also a hard stop so you know when you are done spending in those categories.

Sticking to the budget is the hardest part but it will prevent you from going over the deep end this year and derailing your other financial goals.

Planning!

“If you fail to plan you plan to fail.” Benjamin Franklin

A great way to stretch your holiday budget is to sit down with it and plan out how you will likely spend it. In addition to your monthly budget, Dave Ramsey even has an even more detailed Christmas Budgeting App specifically for tracking gift purchases per person you are shopping for this holiday season.

Sitting down with your realistic budget and making a plan for what you can afford and an idea of what you will get all the various people in your life is a great way to prevent a budget blow-out.

Know Thyself!

How tempted are you when you go out shopping? How will you make sure you are on budget?

If Black Friday will cause you to overspend and throw all caution to the wind…don’t go shopping that day. Perhaps you hit some deals up on Cyber Monday instead.

Or maybe you are the person who forgets your budget at home a lot. Perhaps you create multiple copies and have them in your purse…car…at work…just make sure you can’t forget it.

Basically know what your weaknesses are going to be and try to plan around them.

Become a Deal Shark!

It’s easy to bust through your budget for holiday spending whether it’ large or small. Becoming a deal shark will help you stretch your budget farther, making each dollar work hard for you!

Obvious days for snagging a deal are Black Friday, Cyber Monday, or each weekend leading up to Christmas. There will be sales and more sales you can shop during that time.

However, don’t forget Craigslist, eBay, or Thrift Stores for gently used items. The holidays are a time when some people are selling things just to get some extra cash in their pocket so you can snag a real deal. Or they are cleaning out the closets and donating great items to local thrift stores.

Make sure you capitalize on these deep discount opportunities before paying retail prices!

Get on Pintrest!

If your budget is really tight this year, maybe Christmas is going to be a craft. That doesn’t mean “cheap” or “bad” but it does mean you can make several gifts for a much lower cost than buying at the store.

Get on Pintrest and search for “DIY Christmas Ideas” or something along those lines and you will discover hundreds of blogs and articles. This is a great way to give highly personal gifts while staying within budget.

Stop fearing others!

For some, this might be the biggest hurdle to your holiday spending. It’s easy to fear what this or that person will think about your gifts, decorations, or holiday activities. It’s especially difficult if other people in our lives refuse to budget themselves, respect our budgets, or be grateful for whatever gifts we can afford this year.

When you are getting out of debt, there can absolutely be pressure to feel like you need to spend “x” amount on family because they spend “x” amount on you. Other people could resent you for something as silly as not spending as much on them as they spent on you. Oh well. That’s sometimes the reality and as long as you are doing what’s best for you and the budgeting goals you’ve got this year, you are doing an outstanding job.

No more keeping up with the Jones…not at the holidays and not ever! And hey, maybe later when you are in Baby Step 7 you can have a year where you’re incredibly generous with your family and friends for all the years you had to tightly reign things in! 🙂

Money

5 Reasons You Need a Budget!

October 7, 2013

Many of you are aware of our slight obsession with all things Dave Ramsey. We have gone and drunk the kool-aide and it tastes great! Often we are asked things like, “How do I do what you guys did?”, “Do you think there is hope for my situation?” etc.

We are happy answering these questions, since using Dave Ramsey’s principles and methods have blessed us immensely. We can’t help but want to pass it along as a blessing to others. Hence this post. Trust me when I say that if you don’t have a budget, you will not win with money. Everything hinges on this one discipline, so check the 5 Reasons You Need a Budget below and see if you need one:

budget

1. You wonder where all the money went. 

Have you ever gotten to the end of the month and wondered where your money went? Me too. You need a budget.

A budget is simply telling your money where to go instead of wondering where it went. “Be diligent to know the state of your flocks, and attend to your herds.” Proverbs 27:23

A budget puts you in control of your money, not the lack of money in control of you. It’s giving every dollar a name, whether its savings, fun, or paying off debt.

Can you imagine being in full knowledge of what happened with every dollar that was given to you last payday? It’s empowering. With a budget, there is never “more month than money.” You will feel like you got a raise over night by simply being aware of your money.

2. You check your account balance (in fear and trembling) to see if you can afford a purchase.

Is checking your account balance or mint app your idea of seeing if you can afford to go out to dinner tonight or shopping with friends? You need a budget.

A budget is telling your money what you plan to do that particular month or pay period. You can tell it to have $50 set aside for restaurants. You can tell it $50 for shopping. You can tell it whatever you want, as long as you give every dollar a name before the month or pay period begins.

By following a budget, you take all stress and anxiety away from spending or the dreaded overdraft. If you are married, and you’re spouse budgeted $40 for shoes, you aren’t shocked when they walk in the front door with a Shoe Carnival bag. You budgeted for it. You don’t have to check the bank account to know whether or not you can cover it. And you don’t get into a fight. Double win! 🙂

3. You have used a Credit Card for “emergencies.”

Many people’s “emergencies” look more like needing more gas, forgotten birthday gift, new brakes on the car, a medical copay, or going to dinner with friends. I call these “emergencies” since a they are pretty much all items you should anticipate. Cars break. Christmas comes at the same time every year. You will go to the Doctor sometime. You will drive your car and need gas. These are not emergencies. You need a budget.

When someone is truly in an emergency situation they really couldn’t plan for, the LAST thing they need hanging over them is a nice fat credit card bill charging them 18% interest. The emergency is now a nightmare! No one would wish that on their enemy.

By following Dave Ramsey’s principles, the first step is $1,000 in an Emergency Fund. After you pay off all debts except the house, you fund that Emergency Fund up to 3-6 months of expenses. You don’t need a credit card because you pay for any emergency that comes along. A budget allows you to get into this financial position.

4. You think budgeting is for poor people. 

Do you think that people who budget only eat bread and water or are so broke they have to follow one? You need a budget.

“Adults devise a plan and follow it. Children do what feels good.” Dave Ramsey

“In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.” Proverbs 21:20

Wise people budget. If you poll and study most millionaires, they will tell you they didn’t just win the lottery one day and become wealthy. They had a plan for their money. They made it work hard for them. They told it what to do instead of floating along hoping one day they would have some wealth. They budgeted.

Actually poor people could change their financial position and not be as poor or poor at all if they simply put together a budget. Anyone living on less than they make, telling their money what to do, and stewarding it well will end up winning with money. Anyone can achieve financial peace, whether you make $20,000 a year or $200,000 a year. Both need budgets to win with the money entrusted to them.

5. Your idea of savings is to calculate whatever’s left at the end of the month.

Do you spend and buy whatever you want throughout the month and then save whatever ends up leftover? Or do you not really save consistently at all? You need a budget.

In order to achieve your financial goals and dreams, you have to start putting money aside to pay yourself first. If you don’t do this, the tyranny of the urgent will take over and you will likely never have momentum in your savings efforts. After paying your bills and necessities you can figure out what you want to be saving that month or pay period for whatever goal you are working towards (debt freedom, down payment, honeymoon, newer car, etc.)

This is the secret to really tearing ahead and making progress. However, it does require the ability to say “no” to yourself/others temporarily so you can say “yes” to your bigger goals and dreams.

Need a budget?

In case you were one of those people who needs a budget, you may be wondering where to start? First, I would read Dave Ramsey’s Total Money Makeover to set a solid foundation for yourself. Then when you are ready to budget there are lots of programs, software, apps, etc. out there for your budgeting use. I recommend ones that we have used/currently used.

1. For you Paper & Pen Folks – http://www.daveramsey.com/tools/budget-forms/

2. For you Tech Savvy Folks –  YNAB -You Need A Budget. (includes a $6 off coupon)

We started using the paper and pen and eventually wanted our budget to be in “the cloud” so we switched to YNAB. We absolutely love it. We did try Mint.com and had nothing but trouble. It may be helpful for some but wasn’t for us.

Warning – YNAB does take time to learn and I highly recommend taking the online courses they offer. We LOVE the ability to buy something and instantaneously use our YNAB app on the iPhone to track the purchase. One and done. We always have an accurate view of our bank accounts and know what’s left in every budget category at all times. Our budget meetings take about 10 minutes per month now. Zero surprises. Financial peace.

Let me know how budgeting goes for you!