Wednesday, April 8, 2009

Basic Budget

I thought I'd write my thoughts about creating a basic budget. I know this might seem, well, really basic... but that's all it needs to be! Sometimes I think we make things much harder than they need to be!

I've got my budget complete, and it includes all of these, and then some.

1. House payment or rent
2. Car payment (even if you don't have one, i suggest starting to pay yourself)
3. Home upkeep bills - phone, cell phone, cable/satellite, water, sewage, heat, A/C, electric, internet...
4. Debt - credit cards,
5. Insurance (health and life and car and home...) the insurances that are a must are car and home/rent. the other two, well, i hope you have.
6. Groceries (start with what you know, then write down what you eat monthly for each member of the family for each week.)
7. Gas allowance and car miscellaneous (oil changes and the like)
8. Lunches
9. Pet food and such (dog food, cat food, cat litter...)
10. Vet bills, dry cleaning, etc.
11. Savings allowance
12. Fun allowance

Write it all down. Put a realistic/actual bill amount next to each item. Add them up. Do they add up to your monthly income? Are you over extended?

The next step is to figure out where/how you can cut back, if you are over extended, to be within your budget.

The step after that is to pay down your debt. Take one credit card and pay it off. Feel good. :) Do it again (if necessary).

Save an emergency fund.

Start paying yourself in advance... 401K, savings, IRA, CDs...

For me, I'm paying down debt. I've cut back, way back. I've never lived over my budget, or so I thought. But when you add the credit cards... you see it all adds up and you're likely over budget. Or why else would you use your credit cards every month? Right? You say you don't need it, but think about it. I don't like having to rely on them. The interest is obscene.

I put some of my savings into CD's this month. I use a Credit Union (which I HIGHLY recommend if you can get into one where you live)... because they always have higher CD rates than the normal banks.

By coming up with a plan to get things paid off, I can get my savings boosted back up here soon!! That feels really good :)