The end of the month is here!!! Have you been tracking your spending and bills? It's time to figure out your budget for March. I just sat down and figured out mine - I have to do mine every month since the paycheck varies - If you have a paycheck that is always the same amount - lucky you!!! You only have to do this once essentially (you may want to revisit it from time to time)
Good luck with your Cash Budget and let me know how it goes if you are giving it a try!
Have any questions or roadblocks? Difficulty with any of it - shoot me a question. Maybe I can help.
If your not trying it- why? Just out of curiosity - tell me your concerns, worries or reasons (it might not be for everyone).
Friday, February 26, 2010
Thursday, February 11, 2010
Your Cash Budget
Step 6:
Now you go to the bank!! You will do this every month to take out the money you need for the month. You could also do it by week if you so wish.
You need to take out your grocery money and your weekly spending money.
Suggestions:
- Be strict with yourself - hide your credit and debit cards (freeze them in ice if you have to!)
- Divide your monthly grocery and spending budget into weeks. For example if your grocery budget is $400 and there are 4 weeks in the month - you get $100 a week for groceries. I learned this by default when we first began this Cash budget. The first couple months we would get to the last week and wonder where all the money went. Separating it into weeks keeps us from running short at the end of the month.
- As you become more aware of your spending habits and probably begin to spend less (it's amazing how much less willing we are to let go of actual cash) you may wind up having some grocery or weekly money left over. YEAH for you!!! This is yours to do with what you want - put in savings, put towards your goal, stash away for a day when you really feel like shopping or treating yourself.
- Stick with it!!! It will seem painful at first - but after a few months you will realize the stress is gone and you feel a new found freedom with your money. It's a really good feeling to know you are not spending more than you have and you're not living paycheck to paycheck - which happens to even the wealthiest people.
Good luck and if you have any stumbling blocks, suggestions, questions - please let me know!
Now you go to the bank!! You will do this every month to take out the money you need for the month. You could also do it by week if you so wish.
You need to take out your grocery money and your weekly spending money.
Suggestions:
- Be strict with yourself - hide your credit and debit cards (freeze them in ice if you have to!)
- Divide your monthly grocery and spending budget into weeks. For example if your grocery budget is $400 and there are 4 weeks in the month - you get $100 a week for groceries. I learned this by default when we first began this Cash budget. The first couple months we would get to the last week and wonder where all the money went. Separating it into weeks keeps us from running short at the end of the month.
- As you become more aware of your spending habits and probably begin to spend less (it's amazing how much less willing we are to let go of actual cash) you may wind up having some grocery or weekly money left over. YEAH for you!!! This is yours to do with what you want - put in savings, put towards your goal, stash away for a day when you really feel like shopping or treating yourself.
- Stick with it!!! It will seem painful at first - but after a few months you will realize the stress is gone and you feel a new found freedom with your money. It's a really good feeling to know you are not spending more than you have and you're not living paycheck to paycheck - which happens to even the wealthiest people.
Good luck and if you have any stumbling blocks, suggestions, questions - please let me know!
Tuesday, February 9, 2010
Step 5
You're almost there!! See 5 steps -give or take - that's not so bad now is it?
This step needs to be reserved for when you are finished calculating your monthly expenses - so if you're not at that point yet, be patient and come back when you've finished. You also need to have finished the other steps as well.
If you have a consistent paycheck every month (the amount never varies) then you only need to do this step a couple times (for each bill cycle - those bills that only show up every 3 months or so).
If you get paid twice a month and the pay varies you may need to do this with every paycheck.
If your family is like mine - and your paycheck varies due to overtime or whatnot, then you should probably do what I do and follow this step EVERY month. I know it sounds like a pain, but it does make you feel in control - because you WILL be!!
Step 5:
- Start off by putting your paycheck amount at the top of a piece of paper.
- Now I'm a HUGE believer in paying yourself first (towards your goals - not shoes or electronics); however, let's be realistic. Bills have to be paid. So that is where we start.
- Start listing your bills under your paycheck amount. Remember this includes all automatic deductions taken out of your accounts - even on a credit card.
- If you have credit card debt and your goal is to get out of it - then wait on listing this bill. Same with Student loan debt - IF it is your goal to pay it off faster, otherwise list the minimum amount with your bills.
- Add up all your bills and deduct that amount from your paycheck. You may want to leave a bit of a buffer in your checking account for those bills that vary month to month.
- Deduct what you need for grocery/toiletries (you should have an idea of this from keeping track of your expenses for a month - and you may have realized you could cut back because you were spending more than you really realized.)
- Now it's time to start paying yourself.
- Decide (if you haven't already) on an amount to pay towards and IRA and send this check off right away. This will keep you from spending it later.
- Put an amount of money away in a savings account. Continue to do this until you have a buffer of 6 months living expenses + a little extra emergency fund towards those "surprises" that pop-up (car repair, home improvement, etc).
- Choose an amount of money to put towards your goal.
- Finally, the rest of the money is yours to spend as you wish throughout the month.
Now you know exactly where your money is going and the stress of where the money will come from is for the most part eliminated.
Here is an example of a monthly budget (purely made up):
Paycheck: $4000.00
Bills:
$1000 - Mortgage
$125 - Gas company
$50 - Life insurance
$25 - Sewer bill
$120 - Electric company
$124 - T.V. and internet
$75 - cell phone
$38 - Trash pick-up
$46 - American Water
$15 - Weekend paper
$640 - Daycare
Bill total: $2258 Minus paycheck total:$1742
Grocery and toiletries - $400
IRA contribution - $175
Savings contribution - $300
Goal contribution - $230
Leaves: $637 for monthly spending (going out to eat, buying clothes or other items that are a want vs. need)
For the next step - we will be heading to the bank and hiding the plastic!!!
This step needs to be reserved for when you are finished calculating your monthly expenses - so if you're not at that point yet, be patient and come back when you've finished. You also need to have finished the other steps as well.
If you have a consistent paycheck every month (the amount never varies) then you only need to do this step a couple times (for each bill cycle - those bills that only show up every 3 months or so).
If you get paid twice a month and the pay varies you may need to do this with every paycheck.
If your family is like mine - and your paycheck varies due to overtime or whatnot, then you should probably do what I do and follow this step EVERY month. I know it sounds like a pain, but it does make you feel in control - because you WILL be!!
Step 5:
- Start off by putting your paycheck amount at the top of a piece of paper.
- Now I'm a HUGE believer in paying yourself first (towards your goals - not shoes or electronics); however, let's be realistic. Bills have to be paid. So that is where we start.
- Start listing your bills under your paycheck amount. Remember this includes all automatic deductions taken out of your accounts - even on a credit card.
- If you have credit card debt and your goal is to get out of it - then wait on listing this bill. Same with Student loan debt - IF it is your goal to pay it off faster, otherwise list the minimum amount with your bills.
- Add up all your bills and deduct that amount from your paycheck. You may want to leave a bit of a buffer in your checking account for those bills that vary month to month.
- Deduct what you need for grocery/toiletries (you should have an idea of this from keeping track of your expenses for a month - and you may have realized you could cut back because you were spending more than you really realized.)
- Now it's time to start paying yourself.
- Decide (if you haven't already) on an amount to pay towards and IRA and send this check off right away. This will keep you from spending it later.
- Put an amount of money away in a savings account. Continue to do this until you have a buffer of 6 months living expenses + a little extra emergency fund towards those "surprises" that pop-up (car repair, home improvement, etc).
- Choose an amount of money to put towards your goal.
- Finally, the rest of the money is yours to spend as you wish throughout the month.
Now you know exactly where your money is going and the stress of where the money will come from is for the most part eliminated.
Here is an example of a monthly budget (purely made up):
Paycheck: $4000.00
Bills:
$1000 - Mortgage
$125 - Gas company
$50 - Life insurance
$25 - Sewer bill
$120 - Electric company
$124 - T.V. and internet
$75 - cell phone
$38 - Trash pick-up
$46 - American Water
$15 - Weekend paper
$640 - Daycare
Bill total: $2258 Minus paycheck total:$1742
Grocery and toiletries - $400
IRA contribution - $175
Savings contribution - $300
Goal contribution - $230
Leaves: $637 for monthly spending (going out to eat, buying clothes or other items that are a want vs. need)
For the next step - we will be heading to the bank and hiding the plastic!!!
Friday, February 5, 2010
Step 4
Step 4:
Now is the time to contact a few professionals. (If you are still keeping track of your budget for the month - this is still a step you can do NOW)
You may have noticed that my goal examples did not include contributing to a work related retirement program or an IRA. These things are mandatory!!! You WILL be able to do these with the cash budget. We can't rely on social security to be there or be enough for us when we retire, and no one wants to work till they die - so we MUST take care of ourselves. It may seem like something you can let go - but you can not!!
Retiring at a certain age was on the list - that is there for those of you who would like to retire early - that can be a goal, but everyone needs to be saving for their future.
*Contact the person in charge of payroll and retirement contributions in your workplace.
- Find out how you can start contributing to your work retirement plan - it is usually as easy as filling out some paperwork.
- Decide on an amount that you can contribute each paycheck. It may be small - but be realistic and contribute as much as you can afford - when I was teaching I could only afford $50 a month. It wasn't much, but it was a start!!
- If your work matches contributions (usually up to a certain amount) try your best to contribute the maximum amount. It's FREE money - who doesn't like that!!
*Contact a professional about opening an IRA.
- An expert can help you decide what kind of IRA is best for you.
- If you are married it is a good idea to have an IRA in both your names.
- Decide on an amount you can afford to contribute per month or make a yearly goal and break it up into monthly payments.
* Finally, once these are set up - contact a lawyer about setting up a will/trust. If you don't have the money to pay a lawyer - make it a goal to save up for it and do it as soon as possible. Till then there are some free or less expensive ones you can fill out on-line. It is important to make sure the ones you love will be taken care of and your assets will be allocated the way you want.
- I want to add a disclaimer here. I do not claim to be a financial whiz or expert. I am simply a Type A personality who likes things in order (even finances) and has found a system that works for me and my family. I have had several people ask me how I do it and thought I would share; however, when it comes to your money and investments - always consult an expert in that field.
Now is the time to contact a few professionals. (If you are still keeping track of your budget for the month - this is still a step you can do NOW)
You may have noticed that my goal examples did not include contributing to a work related retirement program or an IRA. These things are mandatory!!! You WILL be able to do these with the cash budget. We can't rely on social security to be there or be enough for us when we retire, and no one wants to work till they die - so we MUST take care of ourselves. It may seem like something you can let go - but you can not!!
Retiring at a certain age was on the list - that is there for those of you who would like to retire early - that can be a goal, but everyone needs to be saving for their future.
*Contact the person in charge of payroll and retirement contributions in your workplace.
- Find out how you can start contributing to your work retirement plan - it is usually as easy as filling out some paperwork.
- Decide on an amount that you can contribute each paycheck. It may be small - but be realistic and contribute as much as you can afford - when I was teaching I could only afford $50 a month. It wasn't much, but it was a start!!
- If your work matches contributions (usually up to a certain amount) try your best to contribute the maximum amount. It's FREE money - who doesn't like that!!
*Contact a professional about opening an IRA.
- An expert can help you decide what kind of IRA is best for you.
- If you are married it is a good idea to have an IRA in both your names.
- Decide on an amount you can afford to contribute per month or make a yearly goal and break it up into monthly payments.
* Finally, once these are set up - contact a lawyer about setting up a will/trust. If you don't have the money to pay a lawyer - make it a goal to save up for it and do it as soon as possible. Till then there are some free or less expensive ones you can fill out on-line. It is important to make sure the ones you love will be taken care of and your assets will be allocated the way you want.
- I want to add a disclaimer here. I do not claim to be a financial whiz or expert. I am simply a Type A personality who likes things in order (even finances) and has found a system that works for me and my family. I have had several people ask me how I do it and thought I would share; however, when it comes to your money and investments - always consult an expert in that field.
Wednesday, February 3, 2010
Step 3
Step 3:
This step is short but may be challenging for some. This is the time to sit down and create goals for your financial future. Think long term. Having goals will help you allocate your money.
Some examples:
- Retire by a certain age
- Save money for child's education
- Have enough money to open up a business
- Build up a savings account
- Pay off student loans
- Pay off your mortgage
- Pay off your car
- Or whatever your long term financial goal may be
You may have several goals - in this case, list them in order of importance. It may be possible to tackle more than one at a time, but in some cases you may need to prioritize and move down your list one by one.
Once you have your goals in place - you know where you are headed and putting that money away towards something you really want/dream of makes it that much easier.
This step is short but may be challenging for some. This is the time to sit down and create goals for your financial future. Think long term. Having goals will help you allocate your money.
Some examples:
- Retire by a certain age
- Save money for child's education
- Have enough money to open up a business
- Build up a savings account
- Pay off student loans
- Pay off your mortgage
- Pay off your car
- Or whatever your long term financial goal may be
You may have several goals - in this case, list them in order of importance. It may be possible to tackle more than one at a time, but in some cases you may need to prioritize and move down your list one by one.
Once you have your goals in place - you know where you are headed and putting that money away towards something you really want/dream of makes it that much easier.
Tuesday, February 2, 2010
Budget Step 2
Yes, I know Feb. is not over yet - but some people like to look ahead and some already know what their expenses are each month. So I will continue on and you can always check back at the end of the month.
Step 2:
- Go through your expenses and eliminate anything you don't really need or can live without.
No one likes this part - but it is crucial if you want to feel like you are in charge of your money. You don't have to completely deprive yourself. I'm not suggesting you never eat out or that you drop your cable/dish; however, there may be places where you can cut back.
Example:
- Check you cell phone bill - do you use all your minutes? Could you go on a cheaper plan?
- Do you need both a cell phone and landline?
- Check your cable/dish bill - do you have more channels than you really watch?
- Could you lower your thermostat in the winter and raise it in the summer? - just a couple degrees can make a difference in your bill.
- If you get coffee daily - could you live with a couple times a week and make the rest at home?
- If you use an automatic dvd delivery system - could you cancel and rent movies for a buck or free from Redbox instead?
- Did you realize how often you eat out - can you cut back a little?
- Buy more clothes than you thought? How about treating yourself only once or twice a month?
Some of these amounts may seem very small - but they add up and will make a BIG difference in your cash budget!!!
We did this very step when we began - and it hurt at first, but we really don't notice it now. The hardest thing for me to give up was my membership to Massage Envy, but when I really thought about it I realized I didn't use it as often as I thought I would and it really was a want and not a need. I don't feel deprived either - now when I want a massage I just work it into the budget and go enjoy - guilt free!!
Now - go attack that budget - where can you cut back?
Step 2:
- Go through your expenses and eliminate anything you don't really need or can live without.
No one likes this part - but it is crucial if you want to feel like you are in charge of your money. You don't have to completely deprive yourself. I'm not suggesting you never eat out or that you drop your cable/dish; however, there may be places where you can cut back.
Example:
- Check you cell phone bill - do you use all your minutes? Could you go on a cheaper plan?
- Do you need both a cell phone and landline?
- Check your cable/dish bill - do you have more channels than you really watch?
- Could you lower your thermostat in the winter and raise it in the summer? - just a couple degrees can make a difference in your bill.
- If you get coffee daily - could you live with a couple times a week and make the rest at home?
- If you use an automatic dvd delivery system - could you cancel and rent movies for a buck or free from Redbox instead?
- Did you realize how often you eat out - can you cut back a little?
- Buy more clothes than you thought? How about treating yourself only once or twice a month?
Some of these amounts may seem very small - but they add up and will make a BIG difference in your cash budget!!!
We did this very step when we began - and it hurt at first, but we really don't notice it now. The hardest thing for me to give up was my membership to Massage Envy, but when I really thought about it I realized I didn't use it as often as I thought I would and it really was a want and not a need. I don't feel deprived either - now when I want a massage I just work it into the budget and go enjoy - guilt free!!
Now - go attack that budget - where can you cut back?
Monday, February 1, 2010
Budget Time
Been without a computer for awhile and I'm finally back up and running!
Okay I'm moving away from the menu thing for a while since it is still a work in progress for me, and moving onto an aspect of organization I've got down pat - The family budget.
10 months ago my family and I switched from using our debit card and having a very loosey goosey budget to what we like to call our "Cash Budget". It seemed a little daunting at first - but we are SO glad we did it and have NO plans to go back.
As the one in the family in charge of the bills and finances it also relieved a lot of stress. It takes some organizing and planning - but it is TOTALLY worth it.
I'm going to take you through it step by step so you can see if this can work for your family.
Step 1:
- Keep track of your family's spending and bills for 1 month. (Figured Feb 1 would be a good time to start)
- Write down every bill that you pay (gas, trash, water, electric, mortgage, student loans etc)
- Remember you may have some that come every 3 months or so - try not to forget about these, you'll need to know the amount for the month they are due!
- Write down every automatic deduction you have that comes out of your bank account (gym membership, daycare, tanning - whatever it may be)
- Write down every amount you spend - grocery, out to eat, coffee, clothes, etc. And write down what it was spent on.
This step HAS to be completed in order to move on and give the cash budget a try - again, a bit of a pain (save the receipts if you want and add them up at the end), but look on the bright side - February is a short month!!
Good luck and if you have any questions let me know.
Okay I'm moving away from the menu thing for a while since it is still a work in progress for me, and moving onto an aspect of organization I've got down pat - The family budget.
10 months ago my family and I switched from using our debit card and having a very loosey goosey budget to what we like to call our "Cash Budget". It seemed a little daunting at first - but we are SO glad we did it and have NO plans to go back.
As the one in the family in charge of the bills and finances it also relieved a lot of stress. It takes some organizing and planning - but it is TOTALLY worth it.
I'm going to take you through it step by step so you can see if this can work for your family.
Step 1:
- Keep track of your family's spending and bills for 1 month. (Figured Feb 1 would be a good time to start)
- Write down every bill that you pay (gas, trash, water, electric, mortgage, student loans etc)
- Remember you may have some that come every 3 months or so - try not to forget about these, you'll need to know the amount for the month they are due!
- Write down every automatic deduction you have that comes out of your bank account (gym membership, daycare, tanning - whatever it may be)
- Write down every amount you spend - grocery, out to eat, coffee, clothes, etc. And write down what it was spent on.
This step HAS to be completed in order to move on and give the cash budget a try - again, a bit of a pain (save the receipts if you want and add them up at the end), but look on the bright side - February is a short month!!
Good luck and if you have any questions let me know.
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