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Money

The February Budget Breakdown

January 31, 2015

Here it is friends.

The FIRST budget breakdown post.

These are meant to help all you budgeting peeps have some accountability and encouragement.

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! The link up is meant to be a source of accountability and fun. Budgeting isn’t the most thrilling activity out there…but when you can take a creative selfie along with it? It becomes MUCH more entertaining. 🙂

So besides the obvi expenses for the month of February (food, lights, water, shelter, etc.) what else might you anticipate at your budget meeting?

  • Super BowlXLIX
    • Food for your party, etc
  • Valentine’s Day
    • Gifts for family members
    • Parties, decorations, etc
  • Items you might run out of this month (toilet paper, paper towels, dishwasher or clothing detergent, shampoo, face wash, etc)
  • Expenses Related to Taxes
    • Accountant/CPA/Tax Preparer
    • Turbo Tax, etc
    • E-Filing Fees
  • Winter clothing needs
  • Small pick-me-ups to ward off Seasonal Affective Disorder (SAD) aka the winter blues
  • Vitamins or supplements that are typically on sale during the winter months
  • Insurance premiums
    • Auto, Home, Life, etc

Perhaps some of those will apply to you and others won’t. Those are all expenses we are experiencing this month that are out of the ordinary that need space in our budget. For some of those bigger expenses like auto and life insurance premiums, we’ve set up what’s called a sinking fund. Since those expenses are almost always the same and we know they come up annually or bi-annually, we put money away in our budget monthly for them. Then when it’s time to pay the expense, money has been accruing all the other months of the year so it’s not such a deep hit on the month the expense occurs.

Now, it’s time for the fun!

Give us your best budgeting selfie and be as creative and out-of-the-box as you want! 🙂 I admit we look terrible in our photo but let’s be honest – that’s how we look on Saturday mornings before we’ve showered for the day. You’re getting us as real as it gets.

[inlinkz_linkup id=491644 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

5 Ways To Derail Your Budget

January 13, 2015

Some of you are new to the world of budgeting.

Perhaps it was a New Year’s Resolution of yours. We’re about two weeks into January so by now you’ve either nailed it, completely forgotten about it, or crashed and burned hard.

No matter where you are with budgeting, I want to share with you five ways you’ll be thrown off course as you learn how to make it a habit in your life.

1. Pretend You’re a Pro

You will mess up your first few budgets. If you walk into budgeting acting like a pro and expect perfection, you are setting yourself up for failure.

How can you be excellent at something you’ve never done before? You can’t. We’re all human. Do your best and give budgeting all the effort it deserves…but inevitably as you discover you underfunded/overfunded/totally forgot certain items to budget for you need to cut yourself some slack. You can get back on the saddle and get it more right the next round.

And the next round.

And the next…until you are a true budgeting pro.

2. Forget About Tracking

If you are one of those people who plans to mentally keep track of your budget as you go through the month, you’re crazy.

You won’t do it.

Especially if you are married and you not only have to keep track of your own spending but that of another spouse’s spending.

Not. Gonna. Happen.

You need a way to track how you are spending money from your budget each month. I don’t care how you do it but you need something other than your fleeting memory. Paper and pen. Budgeting Apps. Dave Ramsey Gazelle Budget website. YNAB – You Need a Budget software.

Something. Anything.

In the beginning we were pen and paper people. We tracked on the back of every envelope how much was spent from it and the various purchases. This worked but man did it get old. We then switched to Dave Ramsey’s Gazelle Budget but it was a pain in the rear to have to save receipts from the day and then enter them one by one into the budget every evening. That’s when we got YNAB software and we’ve never looked back. Jonathan and I can spend from the budget and track it throughout the day on our phones. It then auto syncs in the cloud so our budget is up to date at all moments. Love it!

3. Don’t Consult it Before Purchasing

If you show up at the grocery store or and begin to just place items in your cart without first checking your budget, you will bust your budget quicker than the speed of light. Or agree to go to the movies without first checking in with what the Entertainment category has left in it.

The budget is meant to be a guide and not a noose. By checking in with what you’ve set aside in varying categories, you are giving yourself freedom to make wise choices with how you planned to spend money that month. You free yourself to say “yes” or “no” to whatever items or activity has come up based on what amount is left in the budget for that particular category.

By consulting the budget, you won’t end up accidentally overspending your gas money on one too nights out at the movies.

4. Be Ashamed of the “B” Word

In the world of responsible budgeting, a common phrase would be, “Let me check the budget” prior to spending money. This phrase can be really hard to use when in the company of other people and typically invokes great fear or shame.

I remember in the early days of our journey to financial freedom, it was late in the month and friends we were hanging out with asked us to go to a movie that night. We honestly didn’t know what we had left in our “entertainment” category for the month since we’d already done a few fun things in the previous weeks. Jonathan looked at me and said, “Is it in the budget,” and I got completely embarrassed.

I shouldn’t of felt anything negative since budgets are not a matter to be ashamed of. We had other priorities and going to the movies wasn’t top if we didn’t have the funds available for it. Much to our disappointment, we had already depleted our entertainment budget for the month and turned the friends down. Thankfully they were very understanding but even if they hadn’t been we didn’t need to feel anything but confidence.

5. Over-complicate Things

Lastly, one way to get derailed in the budgeting process is to make things so complicated that even you, the budget creator, can’t tell how or where to categorize things.

There is a tendency to create way too many categories in one’s budget. You don’t have to budget for shampoo. Budget for toiletries. You don’t have to budget for an occasional magazine. Budget personal blow money. You don’t have to budget for Netflix. Budget for entertainment.

You get the idea. Finding ways to bring lots of different expenses under common categories will simplify your life. Think general and make categories for those commonly occurring expenses. Those smaller ones that come up only a couple times a year can find a home in one of your general categories. We even have a “miscellaneous” category for things like stamps, Amazon Prime, and the random items that come up every now and again that need a home in our budget.

If you over complicate the budget, you won’t stick to the budget.

Hopefully you can avoid the common ways to derail your budget this year!

I think the number one reason people don’t stick to a budget is lack of accountability and support. Starting next month we will begin providing some form of budget accountability. We’re still figuring our the logistics…will it be a link-up? A photo? A hashtag? Some combination of those? We are working out the details but starting February 1, 2015 we are here to support and encourage all of you trying to stick to a budget this year!

Hope you can join us!

Marriage, Mission, Money

New Here? Allow Us to Introduce Ourselves

January 9, 2015

Today Amanda guest posted on The Dave Ramsey Blog.

We’d be totally fooling you if I didn’t tell you that we are SO FREAKING PUMPED about this!!! We are basically giddy school girls jumping up and down, thrilled at this opportunity. We are happy to share the story about our path to financial peace and honored to have it available to Dave’s readers.

Many of you are probably visiting us here at True Good & Beautiful for the very first time today.

Welcome!

We want to take a minute and share with you who we are and how you can join us more regularly if you like what you see on Dave’s blog.

Here at True Good & Beautiful, we write about couple different topics:

  • Money

We are Dave Ramsey lovers. Whatever he says goes in this house! In this section you can read the longer version of our journey to financial peace as well as how we used Dave’s principles in the home buying process.

  • Mission

We are also in love with our Lord and Savior, Jesus Christ and His Church. We are missionaries with FOCUS – Fellowship of Catholic University Students. In this section you can read about our missionary adventures in addition to how we are trying to live as Christian disciples in the modern world.

  • Marriage

What can we say, we love the vocation of Holy Matrimony and are thankful for the gift it is from above. In this section you can read about our love story and the ways in which we intentionally work on growing our relationship as the months and years go by.

  • More

There are a few other topics we write about here at True Good & Beautiful – Infertility, Adoption, Parenting, and Intentional Living.

Despite writing about a variety of subjects, everything we post stems back to truth, goodness, and beauty. We believe that anything that relates to these core transcendentals is worth writing about, since they link our earthly reality with heavenly realty. Our tagline – thrive in what matters most is our ultimate purpose here.

Lastly, we love our readers and want to stay engaged and connected with you! Sign up for our posts to arrive directly in your inbox on the top right of this page. Or connect with us on social media below:

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Thanks again for taking the time to check us out and we hope to see you around!

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

One Simple Tool to Keep Christmas from Breaking the Bank

December 2, 2014

It’s that wonderful time of the year once again…

Christmas time. Well actually it’s currently Advent but you know what I mean.

For some of you, it snuck up when you were least expecting it despite the fact that Christmas always falls on December 25th.

Oops.

I fully admit to being one of those people this year. Having a baby on November 10th meant that my time to mentally and financially prepare for Christmas sort of went out the window. Until yesterday…when we had the Teixeira Family Budget Committee Meeting and we had $0 in the Christmas category.

That means Christmas expenses are going to come solely from December’s budget…which is doable by cutting costs elsewhere but we should have saved for the past several months in smaller chunks.

I’ve read the statistics. The average household is planning to spend over $861 on Christmas gifts this year. To us that sounds like a LOT and we don’t plan on spending anywhere near that. To others that might be about right or nowhere close to what you plan to spend. We simply want to write this blog post to be a blessing to all of you, no matter what your Christmas budget may be this year.

For those who have saved up or are like us and all of a sudden need to squeeze Christmas into your December budget, there is a tool designed to help you keep track of your Christmas spending. This way Christmas spending can be budgeted and tracked – reducing damage to your bank account, financial peace, and relationships.

Why are we using Dave Ramsey’s My Christmas Budget web app, and why you should too:

1. No Fighting.

We don’t want to have any money fights associated with Christmas. Not only does setting aside a specific overall dollar amount cut down on the potential arguments but this app lets you break down spending by person or event on your list. That way you can’t even fight over how much to spend per person or worry about going over or under budget for the important people in your life.

2. No Guilt

Budgeting = Freedom. I can go to the mall and joyfully spend lots of money (to me) in one fell swoop without guilt since I know my budget won’t lead me into harms way. I can be guilt-free about walking to my car with a dozen store bags since I know it was all planned and accounted for. Ahhh, I can feel the peace now.

3. Keeps My List Organized

When I am out shopping I always forget who I am out shopping for or who I already bought gifts for etc. The app allows us to track who we’ve shopped for by name and even enter the details of what we purchased for them.

4. Balance and Intentionality

I love how the app allows me to take my overall Christmas Budget and spread it out over the people and gift exchanges I plan to be part of. This helps us think in advance about what we want to spend on certain people, why we want to spend that amount, and what items may fall into that budget realm….making shopping even easier.

That’s why we are using Dave’s Christmas Budgeting app and a few reasons why you ought to download it too!

Protip: You can use this website like an app by visiting it on your iPhone in Safari, then clicking the share button (square with an arrow coming out of it) then selecting “Add to Home Screen.”

Have a wonderful rest of your Advent season as you prepare for Christmas!