Budgeting

Brett and I started the year off with a new budget.  We have been REALLY bad about following our own budgets before so we decided to give it another try with the new year. So far, it's been great! It's hard to not spend over the alloted amount but we have already taken big steps to becoming debt free, which was our goal! Now if we could only start saving for retirement.... that is our next goal.

This is how it worked for us.  We took the estimated average of our income, separately, and wrote it down on a dry erase board in our room.  Since my income fluctuates a little, we took the least average amount I would make in a month so that our income was always more then that.  

Once we figured out our estimated income, we wrote down our monthly bills and the amounts of each. These things included things like:

Electric
Car payment
house payment
credit cards (which we only have ONE left. yay!)
Student Loans
Savings account (we try to put around $500 in each month for taxes and emergency expenses).


Those bills are almost always the same.. so we put them in their own category.  Then we wrote down a budget for the bills that fluctuate:

We don't necessarily budget for things like car and homeowner's insurance because they aren't frequent.  However, we DO keep the extra money in our bank account from each month for those reasons.

groceries + misc. (cleaners, which I will begin making my own... and household items)
Gas (we ALWAYS over budget for this so we end up having more than we planned. YAY Hybrid!)
Eating out

And last but not least, spending money for each of us. We allow ourselves $50 each per month. We must NOT go over that amount.  We can spend that money on whatever we want or we can save it for the next month and add onto it.

The final step is the fact that we keep a small notebook in the car and write down every single purchase. We write down the date, the amount, and where we spent the money.  This also includes anything we buy online.  What it doesn't include, are the monthly bills such as house payment, car payment, and such. We have an online log of that through our bank.  Because we keep track of it, we can see where ALL of our money is going and it keeps us on track with our budget.  It was a little ridiculous at first but now that we're a month and a half into the process, it's just natural to write it all down. 

Every few weeks, we go through our expense log and examine it to make sure we are still on track. We then write the remaining amount on our dry erase board in our room so we know where we are. So far, we have not gone over and we are almost through our second month!  The $50 we have each month is the most difficult with birthdays, weddings, etc. coming up but we are finding creative ways to deal with it such as using our cash back rewards from our credit card to purchase the lumber we need for a play house we will be building for Vera for her birthday. Since Valentine's Day was a few weeks ago, I chose the weekend before to babysit for some extra money to splurge for Valentine's Day.

These are just some ideas. If you would like some specifics as to how much we budget for each category, I'd be glad to share it. I just don't have the dry erase board at the moment to refer to.

Happy budgeting!