I just started getting
out of Debt about a month ago. I haven’t even started paying anything off yet.
But by doing this one item, a weight has been lifted off my shoulders. Do you stay
up at night, moving money around between your checking and savings accounts
worrying about the next payment that’s due in a few days? Are you living in a
constant state of panic, not knowing if your check will make it in your bank on
time to pay your mortgage? I have, and it’s not fun. I would go ahead and say
it’s in my top 5 worst feelings in the world.
There is hope though, and
most people do not do this. According to an article with CNN, in 2016 only 41%
of Americans have this, and that’s a budget. A budget lifted a heavyweight from
my shoulders and that’s why I think people should start off budgeting so they
can wake up from their Debt Coma.
What you need to do is either use an excel document or a word document. We use google doc because I feel that it is easier, and we can add and change things and it automatically saves it. A cool feature for google docs is you can share the document with people, and they can update it in real-time. After you find your desired documentation tool, write down the days of the month and separate them by weeks, for example:
October:
Week 1:
10.01
10.02
10.03
10.04
10.05
You will do this for the whole month. Next, at the top of the document, or in a different document whatever is easier for you, write down when your bills are due from the beginning of the month to the end of the month. Add the due dates and amounts on the corresponding days on the budget. Now, add your paydays. What I do to make it fun is to add the payday numbers in green and the bills in red. Right now you should have something that looks like this:
Budget example:
Car loan: 10.01
Credit card: 10.03
Gas bill: 10.08
Rent: 10.10
Electric bill: 10.11
Checking: 1000
Savings: 200
October:
Week 1:
10.01 Car Loan: -$150
10.02
10.03 Credit card: -$135
Pay Day: +$1300
10.04
10.05
Balance: $2,015
Week 2:
10.06
10.07
10.08 Gas bill: -$50
10.09
10.10 Rent: -$900
10.11 Electric bill: -$80
10.12
Balance: $985
Now you can see which weeks are your heavy hitters and which weeks your bank accounts can breathe a little.
In order to track your money, what you need to do is before each month, write in what the balance is in your Checking and your Savings. After every week you should have a balance for your checking so you can see where you’re money will potentially be at the end of the week.
Congratulations, you just set up your first budget. Now before you start the difficult journey of Ditchin’ Debt, continue the rest of your month how you normally would. Make sure to write down on the budget if you purchase an item. When I first started our budget, we paid a little over $500 in breakfast and lunch at our work cafeteria for the month…we stopped that right away.
The reason why I want you to continue or start the month as you normally would is so you can see the money you are spending on things and what your spending money on. The best way to save money is to be aware of what your spending it on in the first place.
After weeks of torture seeing where your money is going, now you can actually start to save! Look back on the month you just had and add up how much you spent on groceries and gas. Groceries and Gas are the two most constant items that you will spend your money on every month that aren’t bills.
Say for example you found that you spend about $100 every two weeks on groceries and about $30 a week on gas. Your monthly spending on Groceries is $200 and $120 for gas. If you’re able to, try and go grocery shopping every week. Per week the most you can spend is $50, so look at the grocery store flyer and see what’s on sale! Gas is tricky because the price goes up and down so often. When we first made our budget, I decided that we were going to only get gas once a week at $45 and if the car needed more then that then we would have to wait for the next week. That didn’t last long.
My wife thought it would be smarter to get gas when our car was at half a tank instead of waiting for the car to be completely out of gas. That saved us $15 a week compared to my plan since it only cost about $15 for half a tank. So now we do $15 twice a week or less if the price of gas goes down.
Everyone’s situation is different, and I get that. Some of you who are reading this could be living alone, some might have a family of five. I don’t want you to starve or be worried about gas prices. I just want you to be aware of where your money is going. After a few months of budgeting like this I go to bed at ease knowing since I budgeted the months expenses, everything will be paid and on time. The next step though, is to climb out of the ditch you dug yourself into.
Soruce:
https://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html
There is hope though, and
most people do not do this. According to an article with CNN, in 2016 only 41%
of Americans have this, and that’s a budget. A budget lifted a heavyweight from
my shoulders and that’s why I think people should start off budgeting so they
can wake up from their Debt Coma.What you need to do is either use an excel document or a word document. We use google doc because I feel that it is easier, and we can add and change things and it automatically saves it. A cool feature for google docs is you can share the document with people, and they can update it in real-time. After you find your desired documentation tool, write down the days of the month and separate them by weeks, for example:
October:
Week 1:
10.01
10.02
10.03
10.04
10.05
You will do this for the whole month. Next, at the top of the document, or in a different document whatever is easier for you, write down when your bills are due from the beginning of the month to the end of the month. Add the due dates and amounts on the corresponding days on the budget. Now, add your paydays. What I do to make it fun is to add the payday numbers in green and the bills in red. Right now you should have something that looks like this:
Budget example:
Car loan: 10.01
Credit card: 10.03
Gas bill: 10.08
Rent: 10.10
Electric bill: 10.11
Checking: 1000
Savings: 200
October:
Week 1:
10.01 Car Loan: -$150
10.02
10.03 Credit card: -$135
Pay Day: +$1300
10.04
10.05
Balance: $2,015
Week 2:
10.06
10.07
10.08 Gas bill: -$50
10.09
10.10 Rent: -$900
10.11 Electric bill: -$80
10.12
Balance: $985
Now you can see which weeks are your heavy hitters and which weeks your bank accounts can breathe a little.
In order to track your money, what you need to do is before each month, write in what the balance is in your Checking and your Savings. After every week you should have a balance for your checking so you can see where you’re money will potentially be at the end of the week.
Congratulations, you just set up your first budget. Now before you start the difficult journey of Ditchin’ Debt, continue the rest of your month how you normally would. Make sure to write down on the budget if you purchase an item. When I first started our budget, we paid a little over $500 in breakfast and lunch at our work cafeteria for the month…we stopped that right away.
The reason why I want you to continue or start the month as you normally would is so you can see the money you are spending on things and what your spending money on. The best way to save money is to be aware of what your spending it on in the first place.
After weeks of torture seeing where your money is going, now you can actually start to save! Look back on the month you just had and add up how much you spent on groceries and gas. Groceries and Gas are the two most constant items that you will spend your money on every month that aren’t bills.
Say for example you found that you spend about $100 every two weeks on groceries and about $30 a week on gas. Your monthly spending on Groceries is $200 and $120 for gas. If you’re able to, try and go grocery shopping every week. Per week the most you can spend is $50, so look at the grocery store flyer and see what’s on sale! Gas is tricky because the price goes up and down so often. When we first made our budget, I decided that we were going to only get gas once a week at $45 and if the car needed more then that then we would have to wait for the next week. That didn’t last long.
My wife thought it would be smarter to get gas when our car was at half a tank instead of waiting for the car to be completely out of gas. That saved us $15 a week compared to my plan since it only cost about $15 for half a tank. So now we do $15 twice a week or less if the price of gas goes down.
Everyone’s situation is different, and I get that. Some of you who are reading this could be living alone, some might have a family of five. I don’t want you to starve or be worried about gas prices. I just want you to be aware of where your money is going. After a few months of budgeting like this I go to bed at ease knowing since I budgeted the months expenses, everything will be paid and on time. The next step though, is to climb out of the ditch you dug yourself into.
Soruce:
https://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html
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