DS Passion
It's budget day peeps! I know it is a hard thing to think about, but once you get the hang of it it gets easier. Most people HATE the word budget. They look at it with fear and disdain. "Budgets are for people with no life. People on budgets never have any fun. Blah, blah, blah." Well let's see here. I'd much rather have a budget to follow and know where my money goes than with a week left until payday be trying to figure out how to pay for the field-trip my child just brought a form home for.
Here's how Merriam-Webster defines budget. Pay close attention to entry 4:
As I stated in a previous post, we follow a zero-based budget that we learned from my man Dave Ramsey. The idea of a zero-based budget is that every, and I do mean every, dollar is spent on paper before you even get it in your hand. If you look at the forms from the above link, they've pretty much made a budget idiot proof. There are blanks for every possible expenditure, as well as spaces to put something that may not have been listed. The first time you sit down to do a budget it may take an hour or more, depending on how good you are at math. (Yes, I'll admit it took me 2 hours to do our first one. I tried to do it myself, then I finally gave up and begged Mr. Smoochiefrog to help!)
To alleviate first-time budget freak out, Ramsey created a quick-start budget. This one is easier as you just factor in monthly necessities, not including any credit card or loan payments. Things like food, shelter, clothing, insurance-things that are necessary for daily life. Hopefully, you'll still have money left over to pay any non-essentials. You may find that you don't know how much you spend on food and you'll have to estimate. You'll probably find that you are way off. Since tomorrow is the 1st, this would be a good time to do the following. This is NOT a Dave Ramsey step, but is a proven eye-opener:
- For an ENTIRE month, write down EVERY CENT SPENT
Yes I know, "Are you kidding me? I don't have time for that!" Oh and you have time to be in debt right? It's annoying, it's time consuming but so worth it! You'll see on paper how much you spend each day at Starbucks, 7-11, McDonald's. You'll know exactly how much each CC payment is, how much that "quick trip to the store" costs you, what that "one thing at Target" ends up totaling. You'll be shocked, amazed and humbled, but you need to be. Your money is controlling you, and you can't get control of your money if you don't know where it's all going. Yes we've done it. Yes it scared the crap out of us. I can tell you that we used to spend over $100 a pay period on eating out without even thinking about it. Then we'd wonder why we had no money left for anything else. I can tell you that we had no idea how much we spent on gas. That we used to get snacks after filling the car and that used up more money. We'd go into Target and come out $100+ later without having a clue what we'd bought. It's called mindless spending and everyone does it!
So please, if you read this post give it a shot. Try for at least the next week to document your spending. It's as easy as keeping a small notebook in the car or in your purse. Some people who are numbers gifted, like Sasha, would probably take it to the extreme and create a spreadsheet. It doesn't matter as long as you do it. I promise the longer you do it, the more open your eyes will be.
Next week we'll talk more about budgeting. We'll go into more detail on the zero-based budget. We'll talk about how to get your money to work for you! In the meantime, here are some links to chew on:
Households face the Unthinkable: Budgeting
Eight Ways to Cut Your Grocery Bill - be careful of the online idea though. You may pay less per package, but you've still got shipping and handling to pay. It equates to about the same. Warehouse stores too. Don't buy a 1028oz jar of Peanut Butter unless you're actually going to use that much before it goes bad. I'm just saying
Mrs. Furious and her Tuesday posts on money.
Have a great week!
