If you had asked me this question a few years ago, my answer may have been something like… well… um, I try to use a budget. Sometimes. But the real, honest answer was, "no." I have always been a good sale shopper – especially when it comes to groceries, but I was more of a paycheck to paycheck person. Sad, but true. Not a lot of debt, but not a lot of savings either. And then my life changed.
I got a new job and realized that not a lot more was going into savings than before I got my new job. What? How was that possible? For some reason something in me clicked and I realized that I was going to have to make some changes. Bigger changes than just getting another job. But, I had no idea what to do. I knew a budget was a good idea, but I really didn't know how to do it or even where to begin.
I am an online person and so that is where I turned for resources. The first online stop I made was a financial site set up by my Church. I think that a lot of churches have financial counseling and I was happy to find that mine had some great online resources. They even have a budget worksheet that got the ball rolling for me. Immediately I began to see my life take a turn. I was watching every penny and I felt more in control than I had ever felt financially.
The next thing that happened was that I discovered PYP! It was pretty much love at first sight! I learned how to coupon (and learned it was a verb!) and to pinch my pennies even more with awesome online deals and other tips I got at this great website.
One discovery I made while reading the PYP forums was DAVE RAMSEY. A lot of PYPers would discuss the lessons they had learned from Dave and it made me want to know more. I went out and subscribed to his podcast and purchased his books. The one I learned the most from was Financial Peace – but they are all good. Dave has a system that is simple to follow and has "changed my family tree." I am currently debt free with a good emergency fund in place. My savings are growing and best of all – I have financial peace!
So, do you budget? If not, are you ready to commit?
Tina
I definitely do budget, and have been for almost 20 years now. I keep my monthly budget in a spiral notebook, with budgetary line items written in to help keep me on track. Getting a budget ready took a month of spending to figure out WHERE my money was going, then putting it all down and trying to see where my household was "leaking money." Once the excess spending was taken care of, then I could start building up some savings. It took trial and error, and some tweaks and adjustments over the years, but I have managed to accumulate a nice bit of savings, as well as allowing my family some "play funds" as well.
Obviously a budget doesn't have to be written on paper. In fact, my dear husband has been trying to convince me to let him put it on a spreadsheet on our computer for almost as many years as I have been doing a budget. I finally have convinced him that I truly enjoy handling pencil and paper and doing this by hand. Others may want to use a spreadsheet type program for their household budget. Any way it is done is fine, as the goal is simply to have a way to keep track of the household's money.
Budgetary line items in my budget include things like utilites, mortgage, insurance, etc. as well as groceries, clothes, sports (we like to ski in the winter), medical expenditures, and even fun money, which I allot a certain amount to each month.
My immediate family is large, with 5 children, so you can imagine Christmas and birthdays about could kill us financially. So, I sat myself down one day and came up with a gift limit for each member of my family for birthdays and Christmas, and did the same for those we give gifts to outside of our immediate family. That was a huge eye-opener for me when I added it all up!! But, I did; I added it all up. Then I divided that huge number by the number of months in the year, which made it much more manageable. Each month, in my budget, that certain amount is allotted to my "gift" line item. Whether it's a gift giving month or not, that money goes there and is untouched otherwise. By the time Christmas comes, we incur NO CREDIT CARD BILLS that we cannot pay in full!! Believe me, that's a huge relief!
I budget for my family's winter skiing the same way I do the gift budget, so it's relatively painless. I do the same for our medical budget, although that was figured out by keeping track of ALL medical expenditures the previous year, and dividing by 12. Now that my 2 oldest are no longer living at home, we spend less on our doctor's bills and on our clothes, so those line items were allowed to shrink.
Whit gives good advice above. I hope that the budgeting works out and is a success.
Whit
Thanks, Tina – I LOVE that you continue to use your notebook because that's what you've always done with your budget. I have a spreadsheet that I use and it is a comfort thing for me now. Every Monday begins with me sitting down and reviewing the budget.
I have the spreadsheet figure out how much goes where based on a percentage equation that I figured out using the Dave Ramsey books. For example – I have 25% of income going to housing (including repairs, etc.), 20% for food, 20% savings, etc. The equation changes occasionally with changes in lifestyle (my son moved out a couple of years ago). I, too, have a "gifts" category and it saves a lot of stress!
Hope
I do budget (now)
We attened the Dave Ramsey financial peace university seminar–one of the best investments we ever made!
I was spending crazy amounts of time bargain shopping, coupon clipping etc and still not 'getting ahead'. We took his class last fall and by the end of Jan 2011 we should be debt free except the mortgage!!! Never thought I'd be able to say that for several more years!!