Do you Budget?

A lot people tell me they write down a budget every month but they just can't stick to it. Or that once they add everything up they just don't have anything left over for savings. This is a common challenge and I'll admit, one that I struggle with from time to time as well. Budgeting is a habit. Once you get the hang of it, it'll seem like a piece of cake and you'll wonder how you ever survived without one. But getting there can seem overwhelming at first. I've developed a system that seems to work for us, but remember ~ take what you need and leave the rest. You don't have to budget exactly like I do. Take this as a guide. Use what works for you (and don't expect it to all fall into place the very first month.)

The first thing I do is write down our essentials (the things we depend on for survival). So, mortgages first (and if you have a 2nd mortgage or a HELOC, include that here). Utilities next (I don't include the phone in utilities because it is not necessary to survival). Then transportation, then food. Everything else you prioritze and list in order accordingly. Some people think food should be listed above transportation, however the food budget is the most easily manipulated out of all of the necessities so I include that last just in case its a lean month, I can easily skim some off of there. So here is a sample budget list:

• Mortgage ~
• HELOC ~
• Gas ~
• Electric ~
• Water & Sewage ~
• Van Pymnt ~
• Groceries ~

Now, take all of your other bills (phone, internet, cell phone, cable TV, gasoline, credit card, etc, etc, etc....) and list them in order of priority. This is a personal thing and everyone's priorities are different. For instance, our cell bill would probably cause some of you to have a coronary, but its a necessity for us because of my husband's travel schedule. Some may chose to put cable TV next on their list, we don't even subscribe. No one will judge you. You just need to decide what's most important to you and your family.

Now, list the rest of your bills and then start filling in the blanks. Go down the list in order. The first several should be fairly consistent and easy to predict. In the beginning you'll have to guestimate on some of the other bills, but they'll get easier over time, too. Add up all of your bills and then subtract that from your monthly income. The difference is what you put into savings. ON PAYDAY. No questions asked. You transfer it over the day your paycheck hits or the day you cash it. If your number is zero ~ then you need to look over that list of priorities again and see if you can cut back or cut some out entirely.

Because you have now transferred your "cushion" into savings, you will have to track your spending to make sure you don't go over budget. If you go over in a certain catagory, you find another catagory you can borrow from. Once that money is in savings, you don't touch it. If you have to take a few catagories out of your budget, that's ok. Its probably only temporary. You'll get back to it. Right now we're just trying to build a bit of a savings for a rainy day.

Can't find places to cut back or cut out? That's ok for now. Because we'll be covering all of the little random money suckers later. Its not as hard to get them under control as you may think. If you have some money suckers that you'd like specific help with, leave me a comment and I'll be sure to cover those as well.

~ The Frugal Monster