Budget Basics

Sit down with your spouse to compile your budget so you are both on the same page.  Teamwork works! 

1.            Track all your expenses so you have a good idea of how much you spend.  And I do mean ALL... you'd be surprised to see how those little purchases at Target's $1 spot add up!-)  See where you can trim expenses.

2.            Calculate your monthly income.

*HOT TIP*  If you receive a paycheck every two weeks, calculate your monthly income based on two paychecks.  This then gives you two "extra" paychecks a year that you can put in savings, pay down your mortgage, use for unexpected expenses, etc.

3.            Plan your monthly savings amount and what will be your budgeted amount for different categories.  Some categories we have besides the basics:  family fun, date night, gift, charitable donations, medical, car maintenance, clothing, allowance, etc.  If you have a bill that comes quarterly, include the monthly amount in your budget.  For bills that fluctuate such as electric, estimate your yearly costs and divide by 12.

*HOT TIP*  Give you and your spouse a small allowance each month.  This is your "mad money" that you can spend however you want... as long as you stay within the budgeted amount.  Save up your allowance for bigger purchases.  An allowance category makes you feel not as restricted with a budget.

4.           Track your expenses and stay within your budgeted amount.  I use an Excel spreadsheet to keep track of my expenses.  About once a week I sit down and enter my receipts and other expenses.  This helps me keep a general idea of what amounts I have left in each category.  If we are getting low in a category such as grocery, I try to make only necessary purchases...stretching it until the next month.

**If one of you keeps track of most of the finances (like I do), keep your spouse updated on the budget items that concern him/her (such as allowance or clothing).

5.            Every few months reevaluate your budget.  Make changes where necessary. 

***Remember that, while a budget seems restrictive, it is really giving you freedom from the overwhelming stress of debt and by providing for your future!***