But first, a word on why I'm wanting to talk about budgeting again. First off, it's the beginning of the year and right around the time Shane gets a raise. We'll also be moving to Cali soon and paying less rent. So, I've been playing around with how our new budget will work. I always get excited at the thought of being able to save more. But then again, there's the issue of having to buy a new car when we get to Cali and also, saving for a house without destroying our emergency fund.
Although I usually don't watch Oprah, I watched today because Suze Orman was on. She wrote a new book called Suze Orman's 2009 Action Plan and you can download it for free until Jan. 15. I haven't had time to check it out yet, but it's free, so I think it's worth a gander.
Okay, I'll get on to explaining my spreadsheet. I'll start with Income, since that's the easiest.
This is how it'll look at the beginning of the month. You'll of course have to change the "Budgeted" column to reflect how much your checks are. This can be hard if you're paychecks are not consistent. For budgeting purposes, I would suggest going with the lowest number that you expect and planning your spending budget according to that. That way, when you get paid more, you can use the extra money to pay down debt or put in your savings.
In this section, you'll also put other forms of income like interest from your checking account. In the "Other" row, I usually put things like tax rebates and bonuses. I leave "Interest" and "Other" blank under the "Budgeted" column and at the end of the month add whatever those amounts may be to savings.
This is what "Income" section would look like at the end of the month. As you can see, the actual amount of the paychecks is $205 less than budgeted. This is bad. You want to avoid this, especially if you don't have much left at the end of the month. It may cause you to go into the red, meaning you actually spend more than you brought home. It'll make you feel rotten and unmotivated. SO, the goal here is to be honest about how much you expect to bring home. You want to underestimate your earnings if your paychecks are not consistent. And spend accordingly. Which brings me to the next section "Expenses". I'll talk tomorrow about "Fixed Expenses".
2 comments:
I just have to tell you I got Suze Ormans book and so far it is great! It is a paperback and only like $8. I love your budget ideas, I really really am going to try to save a ton more this year, after all I am buying a new car in a few months, so I am in save save save mode right now. If I could just keep the saving part up! I hope you get it or read it and then we can chat about things inthe book. I am so glad you are posting, I really need to pick something and get motivated, since I will be home more and spending less money on the weekends.
You got Suze Orman's 2009 Action Plan? It would be a lot easier to read in a book form. I hate reading stuff on the computer. That's great that you are saving money! We are also trying to save up to get a van, since we only have the one truck right now. But really, we're just trying to save in general because it seems there will be a lot of things to buy in the next few years. I'm anxious to have a house again.
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