Now that you know our budgeting must haves, today we are breaking it down to the logistics. We are going step by step on HOW we budget and our thought process behind it! It seems complex, but it is pretty easy, so keep an open mind!
Disclaimers:
1. Our way may not be the right way for you. If our way works for you - I am SO happy for you! If our way isn’t the way for you - don’t give up, find what works for your family!
2. If numbers are written, they are made up numbers and not using our numbers.
3. We cash flow EVERYTHING. We do NOT use our debit cards, AT ALL. Bills are done electronically. If we purchase something from online, we take the money to the bank then purchase it.
4. We budget every two weeks, because that is how we get paid. We have a calendar with our bills on it and budget for the bills that are in that particular period. Since my pay is not consistent, we do our best to live off of Travis’ income.
5. We don't do a lot or much "extra." If we don't budget for it, we don't do it. Most of our family and friends know that if they want to go out and do something that requires money, to ask in advance so we can budget for it. Haha. It is not always easy, but we know the goals we have in mind and when we want to meet them, so sacrifice is needed in some areas. This also doesn't mean we don't make memories, because we certainly do. Prime example - friends ask us to go to dinner, we decline telling them it isn't in the budget, but we would love to spend time with them and invite them to our house instead.
A FEW QUESTIONS WE ASK OURSELVES BEFORE WE START EACH BUDGET: (I keep these answers in the back of my mind. You will see where they come in when I explain more!)
1. Are there any trips or expenses coming up in the next few months that we need to start preparing for? (vacation, large bill, home improvements, etc.)
2. Are there any small circumstance expenses that are coming up in the next couple weeks? (doc apt, so and so's birthday, friends invited you to dinner, etc.)
MY PROCESS:
So Travis gets paid every two weeks, the check will be direct deposited into the account every other Thursday.
I take travis' check amount and put that in the top right corner, then start listing bills.
The VERY FIRST thing I account for is our tithe. We tithe 10% of all of our income. No if ands or buts.
Then I would start looking at what bills we have from now until the next check.
I will add the tithe and bills up.
Then I will do the check amount - the amount of tithe and bills = X amount.
Now I start looking at our binder and seeing what needs to be replaced, if anything, and I will list those items and amounts. And then list out our expenses, gas (we do per car since we swap back and forth depending on who is driving farther that day to save gas), groceries, we each get a small amount of spending money, etc.
Now I add the binder costs and expenses up.
Then take X amount - binder & expenses = _____
_____ = savings or towards a specific trip/expense we are saving for.
I will then go to the bank and get out the binder cost and expenses in cash and start delegating how much goes where by looking in my notebook. The money that was allotted for bills will stay in the account! If I can, I will pay the bills due as soon as I am done budgeting and will then go into my google calendar and edit the title to paid. Ex. "Dominion power $X" will get edited to "PAID Dominion power $X"
TIP:
If you have a set number you want to save each month or a goal to meet, you can evaluate your budget and see how much is reasonable to do each month, and set that amount as a bill. You may have seen where we are trying to save for a baby fund, so we treat that as a bill, so that it "has" to be accounted for, it can't be missed or "well, we can't afford it this month." This doesn't limit us to only the set amount, we can do a bare minimum of the number we set or we can do more.
Hopefully that wasn’t too confusing for you! I know it is complex, but it works! We know where every penny goes and once you get your groove down, it won’t take you long to budget. It takes me about 15 minutes at most! No excuses, you can do it!
Come back next Thursday to read how we switched over to ALL CASH!
OTHER DAVE RAMSEY RELATED BLOGS:
Read more about how and why Travis and I have NEVER fought about money before and how we have accomplished paying off our debt, paying cash for a car and wedding expenses, moving and more!
With being a budgeting queen/nerd/freak (whatever you want to call it!), I have certain things that I have to have to help me budget and keep us organized! You can see what those things are here!