With us buying a house soon (two weeks to closing!), budgeting is something that comes up again and again. It’s so important that we stay on budget so we can do all the things we want, especially when buying a house! Today I’ve got my friend Christine from The So-Called Homemaker talking about how she budgets – you’ll want to stick around, she’s got great information!
Hi everyone! I’m so excited to be posting on Jess’ blog today, and have loved sponsoring her for the last couple of weeks!
We all know that money doesn’t grow on trees, but even if it did, I would probably still go broke if I didn’t follow a budget. That’s just the kind of person I am. It’s not even so much that I just love shopping…I just tend to buy things without thinking. So since my husband and I are not money-tree farmers, we make sure to keep a semi-strict budget so that what we spend every month does not exceed what we make. And I’m going to share our process and budgeting tips with all of you in the blogger world!
Now first let me just say that no, I’m not crazy and sharing my very personal money information with you. This is a fake budget, based off of the same spreadsheet that we use for our own, but certainly not the same numbers.
As you can see, we have listed our monthly incomes and monthly expenses. Each item is either the exact amount the payment will be (as in a house payment, car payment, insurance payment, etc.) or as close of an approximate as we can get (for things that change from month-to-month such as electric bill, gas bill, etc.).
One thing I would really like to share with you from our budget is our “fun money”. This is something my husband and I came up with when I was without work to keep the peace in our house, but it works well for us so we have continue doing it even since I’ve started working. Essentially what we do is at the beginning of every month, we both get a certain amount of cash. That money can be spent on whatever we want, no permission needed, no questions asked. This helps us because when I want to take myself out to dinner, or he wants to buy some new gadget for fishing, we don’t have to sit and discuss whether it’s fair or not. We both have the same exact amount of money to spend on ourselves. While it’s not a perfect system, it has certainly helped us a ton. Hubby usually winds up saving his for fishing trips, while mine is usually spent within the first week of every month…oops!
Anyway, every month I print out our “expenses” list, and as each gets paid, I mark it off. That way, I have a comprehensive list that I can quickly look at and get an idea of what kind of money is still going to have to come out no matter what. It helps us make sure that the amount in our bank account is larger than what still needs to come out.
You’ll notice that this sample budget does not give an amount for groceries or gas, and that’s because my husband and I don’t budget for them. We used to have a set amount per week that we would spend on groceries, but it became really annoying to keep up with. We also noticed that we were less likely to try new and adventurous recipes because we were limiting our money to a certain number. While we obviously keep grocery shopping trips reasonable, we do not have a set amount for the month. And gas prices just change too much to keep up with.
As you can see, we don’t budget everything. But having the things we know we’re going to have drafted from our account on a sheet of paper to keep track of really helps us a lot. It also helps us to avoid forgetting to make a payment, because it’s obvious when it’s not marked off.
It’s your turn! Tell me how you budget. Do you have a system? Share your tips!
P.S. If you’re not already following her, make sure you check out Christine’s blog – she’s become one of my favorites!
Hi! I think the budget could use a savings category, making savings a priority, not something that is done with the leftover money at the end of the month. Savings is extremely important, and the piece of mind that it provides in so valuable, at least to me. Good luck with your new house!
Amen to that! Add savings as a line item expense and get the $$ direct deposited to a savings account. If it never hits your wallet or ATM card, you’re less likely to cave in and spend it. 🙂 I follow Michelle Singletary, who writes about personal finance for the Washington Post. She advocates strongly for a “life happens” fund, which should have enough to cover a car breakdown, or a roof leak, or a broken refrigerator. Don’t put yourself in the position to have to dip into savings or retirement to cover these un-budgeted expenses that are guaranteed to pop up when you least expect it.
And there was no line item for credit cards? Unless you operate on a cash-only basis (which I would love to do if travel reservations/online shopping weren’t a necessary evil for me), it’s likely you’re paying at least one card a month.
We use a system called YNAB or You Need a Budget. We absolutely love it. It allows us to see every category our money is going to, and how we can save or spend our money. Everyone needs a budget, it keeps you on the right track and out of debt. Try it, it’s free for the first 30 days, and then $60 for a lifetime. Trust me, you will love it.
Love the “fun money” idea… Sometimes we’re trying so hard to save and I feel guilty getting the new pair of shoes for work that I need. Even a little set aside for this sounds like a cool idea!
I love this, currently we only have one income, well two but their both his. so I just get a weekly set for groceries and he takes care of the rest.