I’ve been making a monthly budget for a few months now and I think I’m hooked. I’m currently using Dave Ramsey’s Gazelle Intensity program online since I have it free while I’m attending FPU. I think I’m probably going to subscribe to it once the program is over. It’s $65 a year but it makes my budgeting session so much faster. I’m trying to put together a spreadsheet that is similar to the software but I’m not really thrilled with it yet. I’ll ask my husband, the computer programmer to see if he can make it better.
I really like doing a monthly budget because it allows me to spend all of our money on paper before the month even starts.
Here are the categories in my budget:
- Emergency Fund
- Retirement Fund
- Mortgage (includes property taxes and insurance)
- Second Mortgage
- Repairs and Maintenance
- Furniture Replacement
- Netflix (yes, I consider Netflix a utility, just like cable)
- Eating out
- Repairs and Tires
- Car Insurance
- Licenses, Registrations and Taxes
- Car Replacement Fund
Medical & Health
- Drugs (prescription and over-the-counter)
- Life Insurance
- Hair care
- Organization dues
- Gifts (including Christmas)
- BLOW (this is pocket money with no rhyme or reason)
You may find that there are other items you’ll need to put into your budget. If you have saving for college, that would go into the savings category. Things like that will need to be added to your budget.
I slot in all of our expenses and see how much money we have left. I then discuss the remaining money with my husband and we decide what to use it for. Most of our leftover money goes to pay down debt. This month, we had an extra paycheck so we decided to use some of the money to repaint the family room and get some new light fixtures and a ceiling fan for that room. The rest of the money is going to pay down debt.
At the end of each month, I look at what we’ve spent to see if we need to make adjustments to next month’s budget and to transfer funds to the savings account. Some of the funds, like trash, car replacement, car repairs, gifts and travel will go into the savings account until we need them. I try to zero out my account from last month once we get our first paycheck for the new month. I just look at my balance in the check register (not on online banking) at the end of the month and allocate that money to a savings bucket. It all gets transferred to the savings account. Make sure to use the balance in your check register, not your online banking balance because you might have items that have not cleared the bank yet. You don’t want to transfer that money out or you’ll short yourself for the next month’s budget.
To keep my savings buckets separate, I have an Excel spreadsheet on my desktop with the totals for each category. It takes me about 30 seconds to update this each month after I’ve reviewed my budget. I think the entire process (reviewing the old budget, allocating the funds to savings and making the new budget) takes me about an hour each month. I think it’s well worth it since paying my bills has gotten a lot faster. I’m also so comfortable with my budget that I’ve placed everything I can on automatic payment. I go into online banking about once a week to download my transactions and see how I’m doing compared to my budget.
I feel much better about our financial life since I started doing this. It seems like a lot of work when you read it, but after a few months, it’s a breeze. Plus, isn’t your financial future worth an hour a month? I’m sure you can find an hour in your busy schedule to do this.