Money Monday ~ Step 1, The COMPLETE BUDGET
Okay – it’s time… time to for me to admit that, although I am an AWESOME deal finder and do-er, I take all of that savings and I blow it! I blow it, my husband blows it, my kids blow it… we are broke!!
We are living paycheck to paycheck and can’t ever seem to get ahead… there has to be a better way, I have started researching the options and I have vowed to MAKE IT STOP!
Anyone that is on my facebook feed (go ahead, FRIEND me!) may have seen the highly commented post regarding the “ENVELOPE SYSTEM”… this is where you put the CASH for all of your incidental expenses into an envelope and you pay only with the cash you have. Once you are out of cash, you are done! Now I know some people do this monthly, but I need to do it on a weekly basis because otherwise I would probably start out spending my monthly budget all the first week then be broke for three. Just keeping it real – I know myself.
So – first things first, in order to know how much to put in the envelopes, you have to have a DETAILED, COMPLETE BUDGET. Your budget has to be real… you have to know how much you have coming in and what every single one of your “fixed” living expenses are; your mortgage or rent, your utilities…. All the bills that must be paid monthly in order for you to have a home to live in. Living expenses are deemed the most important because you must have a home to live in! Then, category 2, any and all other bills you have monthly…. Car payments, loan payments, credit card payments… These are bills you have to pay and honestly should work the hardest to pay off the soonest. Third, you have to list all of your monthly incidentals… any and all things you would need money for weekly… groceries, gas, spending money – absolutely everything you would need, or do spend, cash for/on each week.
Now the biggie – does the money you bring in, cover all of your expenses? If you are lucky, or smart, or good at budgeting, then YES it does and you can simply make yourself accountable for your expenses. BUT if you are like me, and millions of others, you will see that your expenses (or list of items you spend $ on) take all – or more – of your income and you have a problem… with spending! This is an uncomfortable position to be in, this is when you ‘rob Peter to pay Paul’, or use credit to buy gas and groceries and end up using your grocery and gas money to pay the credit card minimums. Vicious cycle I tell you and frankly, I want off this ride!! By making myself and my family accountable, we are going to get there! If you do not have enough bring home income to cover all of your expenses, you have to either reduce your expenses or increase your income. The thing is, you cannot determine what to do or how to do it until you see exactly what the full situation is.
Anyone that wants to also be held accountable can play along. This is a step by step process and as stated, the very first step is the COMPLETE BUDGET! So grab paper and pen, start your list, hit these main categories and add what you need to:
1. Fixed Living Expenses – Mortgage/Rent, All Utilities
2. Monthly Loan Pays – auto, bank loans, credit debt
3. Weekly Expenses – gas, groceries, spending $
Get it all down – and while you are at it, make sure you have a file detailing all this pertinent info. Once we started working on this, we realized my husband didn’t even know which bank held our mortgage… Oh my! Not to mention all my accounts are online and he would have no idea how to access them…. Not a good thought but one that needs to be addressed!
So – GO – get started now! Together we will conquer this! This week’s chore is to create the honest to goodness COMPLETE BUDGET and gather all pertinent information regarding any and all bills you pay.
Meet back here, next week on MONEY MONDAY and we will see what the next step in our financial planning session is… HURRY, GO, DO IT NOW!!!!