Budgetting

I know this is something that your mother told you that you needed to do, and if she didn't she should have. This is extremely important! I never realized how much money my wife and I waste, yes WASTE, every month by not being on a budget. Let me put this into perspective. After putting our monthly income on a budget I found that we WASTE almost $500 a month! 500 dollars!

I sat down one weekend and scoured all of my old saved utility bills, electric, rent, water, phone, internet, etc and separated each one, added 12 months of them together and divided by 12 to get a "monthly average over a year" then recorded this number on a piece of paper. After all the normal "bills" were done into monthly averages, car payments, utilities, rent, credit card, etc. I sat down with my bank statements, this part took awhile. I needed to figure out how much we spent on gas and groceries. I looked at statements and averaged and looked at more statements and averaged some more.

Many people recommend the "envelope system" which is basically taking your money that you have budgeted and putting it into an envelope and if there is no money in the envelope you can't buy anything from that "area" whether it be groceries, gas, or going out to eat (and if you do you have to "rob" another envelope to cover it). This system works pretty will in a cash society where everyone uses cash, When trying to budget I realized this would be a pain for us because our check are direct deposited into the bank (like most people) and we never see the cash so putting it into envelopes is tricky. We decided the best thing to do was put play money in the envelopes as a place holder and make sure we're diligent to remove it when we spend something, even $1 in that category.

Like I said, budgeting our income showed me that we have a surplus of almost $500 that doesn't go towards bills, groceries, gas, insurance, car repairs, or doctors bills and that usually just disappears throughout the month. We've decided to take this extra $500 and apply it to our debts to expedite the process of getting out of debt (without extra payments and without adding more we're scheduled to be out of debt in 2017...no thanks!)

Basically I highly recommend getting on a budget, as will EVERY OTHER financial counselor you will ever talk to! This is the only way to track your expenses and the cut frivolous spending. You don't have to use the envelope system I outlined, but use something! Any budgeting system you can find that works for you is better then none at all!

Stop in tomorrow to read my review of an online budgeting tool that I have used and is really great! It automates much of the process, I just found a manual process held us more accountable to our spending. If you like online banking this tool might work for you!

Jesse

First post and introductions

I just wanted to start my first post introducing myself. I'm Jesse, nice to meet you. This blog is about money. There isn't going to be any "get rich quick" things in here...ever. I may write about things that will make you a little money here or there, or something that you can do to get an extra 5 or 10 bucks every week or month, but mainly I'm going to give advice about what to do with your best wealth builder -- your income from your job.

I want to let everyone know in the first post (like anyone is going to read this anyways :-P...but one can hope!) that I am not rich, I'm not a rich guy telling you how to become rich like me, though someday I hope to be in that situation. I'm an ordinary guy with a job and a wife (no kids yet, but someday). I'm an ordinary guy working to get out of debt. I'm an ordinary guy that bought into the lies of American society that said I could buy whatever I want now and worry about paying for it later. What is not ordinary about me is that I grabbed my incoming money by the throat and decided that I want to be in control instead of money being in control of me.

I recently read a book by Dave Ramsey called The Total Money Makeover and I would recommend this book to anybody that wants to turn their financial life around. He doesn't give you any "get rich schemes" and you aren't going to find many here either. He does show you how to get out of debt and get a control on your money and your life.

Many of the ideas I present here are from his book and others and if you keep returning to my blog you will see my progression as I work my way through his ideas and the ideas of others on my way to financial freedom. If you keep stopping in you'll see me work my way to ZERO debt and then my life after (which right now I can't imagine what it will be like). Please follow a long with me as I work through this journey, encourage me in my comments, and I'll try to be an encouragement to you through my posts.

I'm going to give a small overview of my financial situation as a starting point to my story. My wife an I are recently married and determined to get out of debt and stay out of debt forever. We currently have only 3 debts which amount to almost $35,000 in debt. Our 3 debts are:

Truck: $2800
Jeep: $14,500
Student Loan: $17,500

It seemed at the end of the month that we had just enough money left over to pay the minimum payments and never any extra. We lived with no budget and only "rough figures" in my head. I never overspent to the point I wasn't able to make the minimum payments, but I never kept enough control to pay more.

This month will be our first month with a plan and a desire to get out of debt. Tomorrow's post will be about our budget. This coming week will be the first paychecks that will be put into our budget, and this next month will be the first month I have some control of our finances. I've decided early in our marriage that I don't want to let money be something that will cause arguments and luckily my wife is on board too. Check back tomorrow for our budget.