Its no secret that we MUST live by a budget in our house. It is simply not possible for us to live off of one income. Trust me, I'd be a SAHM in a heartbeat if two things existed, the first being that I had a child to actually be a "Mom" and the second would be my husbands huge paycheck.
While we aren't living in poverty and we are very blessed to have a home, running water, clothing and food we still don't live a life of luxury where we can ignore vicarious spending. And even having two incomes, we still have unavoidable expenses that take most of our money away as soon as we get it (house, truck, student loans, utilities, gas and grocery expenses and medical necessities).
I don't have budgeting down to a science and I still get off track sometimes, but knowing where your money goes is the most important thing to me when it comes to budgeting. Here are my basic "rules" for my budget and sticking to it. Keep in mind, these are the five basic rules to budgeting that help me, these may or may not work for you and your situation.
I may also need to add that I say "my budget" because my husband and I do not share bank accounts or money. I know that may seen super weird to some, but for us it just works. He likes to handle his finances a little differently than I, and as long as someone doesn't come knocking on my door to repossess something my hubs has forget to send the payment for, then we'll keep it that way.
1. Log all expenses/debts from account. (I list EVERY purchase on a spreadsheet. Sort of like keeping up with a checkbook register, except I can categorize the purchases to adjust the budget accordingly)
2. Pay yourself first. Any money that I want to put into savings or hold onto for something specific happens the very minute my direct deposit hits the bank. I always "pay" my savings account first and then pull out any cash for specific purchases like birthday gifts. (Using only cash for specifics also keeps me from overspending or going over my spending limit. Since I only have the set amount of cash - I can't spend more than I have in my hand unlike my sweet, nifty, darling little debit card.)
3. All known expenses come next. Any bills/payments due within 2 weeks of pay day (I get paid bi-weekly) get paid after I pay myself. If I pay these before spending any money I know that I'm in the clear and don't have to worry about them.
4. I set limits. I limit myself to eating lunch out only once per week and take my lunch the other days. I limit eating dinner out to once per week as well and try to stick to wallet friendly restaurants.
5. The day before I'm paid I utilize what's left over. If I'm about to get paid again I take a moment to "use" up the money left in my checking account. This helps to fool me into thinking I have zero money, therefore, I can't spend what I don't have. (Of course, I leave a certain amount in there for unexpected things and such). I try to divide whats left between what is most important - for example; currently I'm putting any extra money that is left towards the balance on a credit card that we used for an emergency situation. The card doesn't charge interest until October, so my goal is to pay it off before its accrues any interest. I just make an extra payment with the left over or put extra into the savings account.
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