Monday, October 4, 2010

Learning to Budget

Ahhh, its the beggining of a new month, so its time to sit down and come up with a budget and spending plan for the month.

I am not a natural budgeter.  We've tried so many times in the past to stick to a budget, but I always ended up spending whatever, and then hoping the numbers would somehow match up at the end of the month.  Since starting our money make-over, we are trying to stick to Dave Ramsey's system.  We sit down together at the beggining of the month and plan a whole month at a time.  We start with my husband's  lowest possible expected income ( it fluctuates ) and start deducting in order of priority.  I can always go back and adjust his income on our spreadsheet if he ends up with more pay than we expected...which also adds to the bottom line in the nifty spread sheet I made.  We pay the minimums on everything, and divide up whats left among the more flexible catagories, like groceries or gas.  Then we take those amounts out in cash, put them in seperated spots and spend only that.  I have to figure out how to live on that amount, not figure out how to make the amount I wanted to spend fit into the budget.  Whatever is left goes to the emergency savings fund, until we reach $1000 ( Dave Ramsey's suggested number).  When we have an emergency fund, we'll start hammering away at debts.

This plan also means we have to sit together and evaluate what things will or may come up this month.  For example, this is hunting month at our house, so we need to figure in the cost of tags, ammo, and the added fuel bills.  If there is a birthday in the month, we need to plan on the amount we can spare for a gift..and stick to it!  If someone needs to renew their drivers, or it's school photo month, it all has to go into the month long plan.  Then Dave Ramsey's rule is...if its not in the plan, and its not a major emergency ( think water heater exploding, or engine lighting on fire in your only vehicle) you do not pay it.  Many things that might come up can wait until the next month's planning session.  If an emergency does genuinely come up, a mid month re-meeting is called with your spouse ( if you have one) to decide how you will cover that bill (take it from the emergency fund etc).  Well, that is the plan anyway!

This is our third month trying to stick to this, and we have not been perfect, but thanks to God, we are making progress!  In the first couple months, we realized that there were a few items that seemed to trip us up, because we forgot to check if we needed them.  First was dog food, oops, sorry pooch but I can't let you go hungry!  We also forgot to check if we had enough toilet paper to get through the month...I can't eat it, but that was definetly an exception!!  The first month we forgot to plan on enough laundry soap, but now with a 10 gallon pail in the laundry room, I don't think we have to worry about that one anymore!  I also didn't leave wiggle room for things like my son's school mate having a birthday and inviting him ( which I might add was dumb of me since they have been friends for three years, and I knew when this little guy's birthday was!).  I'm learning, and each month, we add to our list of things to double check, and hopefully, we won't make the same mistakes again!

Do you have some things that seem to get left off your plan?

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