Budgeting Basics and Tips

It took me and my husband 2 years of very poor spending to realize that regardless of how much you make you ALWAYS need to keep track of your expenses and have a budget.  We didn't keep track of the outgo vs ingo and now we are climbing our way out of debt. But we learned early enough that we can thankfully fix it before we eventually retire.  As far as actual budgeting goes there are a few things I would like to point out:
Having a system is KEY! I use an excel spreadsheet similar to this one HERE. I have no clue where I found this from as it has been sitting in my documents for quite some time.  Mine is more detailed however and has four tabs in my excel sheet.  The first tab is our monthly expenses, the second is our debts that we are paying off, third is all our login info for bills (which I recommend password protecting if you let others use your computer), and I keep what I call a Temporary register.  I sit down twice a month and pay bills.  Each time I do so I go into that tab and at the top type in what our balance is. Then I type out what bill I just paid, how much it was, and the balance after.  This way I can keep an eye on the bank account to make sure it all goes through. Once it does I erase it for the next set of bill paying.  I also on the first tab of monthly expenses have a color code.  If the balance is in black it is paid on time no problem. If it is in red we are late or owe on that bill, purple means it is not yet due but I know how much it will be so I can plan ahead, and blue means it is taken out of the account automatically every month.  I suggest if you are trying really hard to get a handle on your finances and budget to do it manually for a few months so you can see where it all goes first hand. And if you have a bill that takes out every month that overdrafts your account every time, you need to fix that.  That being said here is how you start this process:
1.  Sit down (if you can or have one, with your partner) and gather up ALL your monthly billing statements.  Things that are due EVERY MONTH (or like one of mine, every other month) like your utilities, mortgage/rent, phone, etc.  Sometimes you have to look online at your account to get this information if you are doing estatements so do not forget about those. Here is what is should resemble:

Company	Date Due	MARCH
Daycare	1	$120.00
Mortgage	1	$0.00
Dish Network	11	$0.00
Time Warner	12	$8.72

So you have the company you pay to, the date in which it is due (and if you notice I list them in order) then under the month in which I have to pay them how much I owe. After a few months of doing this you also start to see trends in your bills. Some are higher than others in certain times of the year, others are consistent which helps you get a baseline for your finances should you get overcharged for something at some point.  You will see a red flag when the amount due is higher than normal. This is actually a funny month for me to be giving an example because we were ahead in our mortgage, that was our first month of Dish so it was free and I overpaid Time Warner the month before so that is all I owed lol. I promise you, my bills look NOTHING like that lol.  Moving on.

Your second step is to sit down and add up (bank statements come in handy for this) how much you spend per month on NON bill things.  Such as groceries, eating out (this is separate from groceries), clothes, shoes, etc.  Things that you know you need/want but you do not actually get a bill once a month to pay it. An example would be:

	March
Clothes	20
Eating out	50
Groceries	600

If you have a hard time knowing what you spend your money on, look at your bank statements, start saving receipts, and sometimes you can get your financial institution to provide you with a breakdown of the previous years expense report which will show you restaurants, grocery stores, clothing, etc. Our credit card does this and seeing 60% going into eating out was an EYE OPENER!  But we were living out of a hospital room..and that is another blog for another time.

Now that you have those two tasks done, add up what you make each month.  What is your AFTER TAXES income?  Add your monthly bills separate of your NON bill expenses.  Now compare those two numbers with your income.  Are you scared yet?  I was.  You think on a daily basis "it's only 10 dollars" but those dollars add up.  Ever gone to the dollar store and next thing you know you spent fifty bucks?  The whole time you kept thinking "wow this is only a dollar!" and you walk out fifty dollars poorer.  How many of those things did you NEED?  It took me a LONG time to get out of that habit.  Now I talk myself out of everything and it drives my husband nuts lol.

Looking at those numbers, what can you cut?  Do you HAVE to have the QUICKEST internet just to facebook?  Do you have that quick internet for gaming?  Cutting out the gaming and lowering your internet can save you anywhere from 20-50 dollars per month depending on your internet provider and gaming costs if you have any.  What about your cell phone plan.  Do you need 1400 minutes? Are you even using those? Look at your usage for a lot of your expenses and you will notice you can cut back a lot.  I got rid of my blackberry because I am a stay at home mom so I have my computer handy and do not need internet.  By doing that I save 30 a month.  Now they have tiered plans which aids in that amount but I still do not need that excess.  Do you go out to Starbucks EVERYDAY?  Limit yourself to once a week and find a local coffee stand to purchase from.  These little places are privately owned so that money is going right back into your community, most of them have punch cards where you can earn a free one, and the prices tend to be lower.  Also when you become a regular the girls actually make an effort to get to know you where at Starbucks sometimes they do not care as much.  I will make another blog about some more money saving tips, but this is a good start for you.

I hope that this helps and you find that there IS a light at the end of the tunnel of debt.  It can be a little overwhelming at first, but do not be afraid to seek help from financial advisers, your bank, or even a family or friend!

GOOD LUCK!