Friday, July 4

First day of the budget!

So, Being that it is Friday now I officially have my first paycheck that gets budgeted! How exciting! I'm a little fearful of this next month because I'm not sure that the budget is designed for all the "little things" that come up every month or things I just plainly overlooked.

My budget is basically broken down into a few categories, Tomorrow I'll be going over them specifically to outline exactly how we're breaking our money up and hopefully someone can comment if I've left anything out! The basic categories are:

Car Payments
Fun Money

This week has been pretty stressful because I made sure to empty my checking account to start from a 0 balance (actually there was $3 in the account, but close enough). I socked everything else away into an emergency fund ($1000). I'm not used to not having even just a little money to flutter away! I couldn't even buy anything at the cafeteria at work which I usually do once a week, it was just weird and it was always in my mind that there was NO MONEY in the account to spend.

Also another thing is the way I've split the budget, some envelopes only get paid once a month their full amount, like our fun money, except that it is the LAST week of the month (because it assumed carry over into the next month) only there is no carry over this month so it will be pretty tough to stick to our budget when we don't even have a little room this month because of out fun money envelope not being funded!


lulugal11 said...

My budget looks a bit like yours, except I have credit card payments in there...and no fun money.

All the best with your budget..looking forward to see how it goes.

Hermgirl said...

Hey Jesse:

It seems to me that you made some bad planning decisions when you worked out your ideas for your budget--which, from one of your entry titles a couple weeks later from this one, caused you to run into some problems down the road a couple of weeks later.

I'd like to offer a possible solution for your consideration if I may: It seems one of the things you left out of the planning stage was the idea of tracking your expenses for a month or two. This would be the first thing you would need to do, to gage how much you spend, and on what.

Now, once you have that info, you then want to divide your income into several buckets:

#1 Fixed monthly payments: Rent, car payments, insurance, utilities, minimum payment on your debt--things you already know going in have to be paid each month, and you know their fixed amounts.

#2 Groceries and Gas: this is where your tracking of spending and gaging how much you spend each month comes in--these are necessities, but they can fluctuate, so you will estimate how much you spend each month, and this amount will be set aside.

Once you have those two major areas covered, you will then divvie up the remaining amounts into five buckets, this is "discretionary money"--the amount you put in is at your discretion:

#3 Retirement: put this into some kind of safe investment vehicle, like CDs, or Roth IRA, what have you.

#4 Emergency Savings: this is money that would sit in a basic savings account and not ever be touched except in a medical emergency or some catastrophy that you had to pay for. The idea is it's in a liquid savings, so that there will be no penalty if you need to draw it out for any reason.

#5 Paying Down Debt: this is the over-and-above money for paying off your debt, one fifth of your discretionary buckets seems small, but while you are in debt, you will combine it with #6.

#6 Long Term Savings and Big Ticket Items: This is for buying things like cars, large appliances, computers, down payments on a first home, stuff you have to save up a long time and even do some short term investing for. While you are in debt, use it in combination with #5.

#7 Fun Money: dining out, hobbies, indulgences, the "finer things".

When you finally get out of debt, you can either get rid of bucket #5, or turn it into a college fund for children or whatever you think you might need another bucket for.

I hope you found these ideas useful. I wish you good luck, and I'll be reading!