Living on a Budget!

Happy Monday!!!

Do you budget or do you just coast through your finances paycheck to paycheck?

I am a budget person! I have spreadsheets broke down with monthly expenses and expense by paycheck. I have broke it down very detailed for us, so we can see where our money needs to go each month. 

I was not always a person who lived on a budget. I think it was about 6 or 7 years ago when this all finally clicked for me. I started doing spreadsheets to see where all our money was going. Gooooood lord what a wake up call! I was tired of living with debt and decided enough was enough. I really got on a budget kick 4 years ago.

I started spreadsheets of what debt we had, I came up with a plan based on each paycheck and I got busy. In one year I paid off around $30K in debt. It was insane! I have made it a mission for us not to get in ourselves into debt like that either. The year I got out of a lot of debt was a strange year we were able to bring in extra money. We do not have an extra $30K in our budget whatsoever. If people saw what we actually bring and our financial status they would be in shock. 

Living on a budget means you can't have every nice thing out there. If you are making a million bucks a year, you may be able to afford a lot more things than I can on a much tighter budget. 

Lets talk about how I set up our budget. 

1. Write down everything you need to pay in a month

• Rent/Mortgage 
• Electricity
• Insurance - car, home, life or any type of insurance that isn't deducted from your paycheck
• Cell phone
• Cable/Internet
• Gas for your vehicle
• Groceries
• Garbage
• Water
• Car payment
• Student loans
• Child care
• Eating out
• Gym membership
• Amazon purchases
• Target
• Credit card payments
• Coffee, lunches, date nights, nails, whatever else you spend money on regularly add it to your list

I list each item out and put a dollar amount beside each one. As an example your electrical bill might be more in one season than another. For us we spend more on AC in the summer, so I take the higher amount and spread that out between both pay periods. If your electrical bill runs around $300 per month in the summer then you need to allocate $150 per pay period for electricity. 

We eat out once per week. Art takes food for breakfast and lunch each day. G packs a lunch for school. I eat out maybe every few months for lunch. Our eating out budget is minimal, but our grocery budget could be a lot more than yours. When we eat out it's around $60-75 per meal. I can buy groceries to feed us for 5 days with that amount of money. 

I do my grocery shopping at Aldi, Walmart pick up, and Costco. Eggs at Walmart are around $7 for 5 dozen. The same eggs are $9-10 at Costco. The nice thing with Walmart pick up is I can place my order, drive up, they load it and off I go home. I don't buy extra things I might want or things the kids want me to buy. I am able to buy mostly organic items doing this at a cheaper cost. 

That is how I start my budget. 

2. Break out your expenses by pay period

If you get paid once a month you don't have anymore work to do. If you get paid every 2 weeks then here is where this part comes into play. 

I put the paycheck amount at the top of the spreadsheet. I take the monthly categories and list them under the paycheck amount. Then I decide how to break it out. We spend around $500 a month on groceries. I break that down by $250 per pay period. I try to only shop once every 2 weeks to keep up within budget. 

Our electric bill I break that out by pay period and I pay it each pay period. When we get paid I take $150 and apply it to the electric bill. This way we stay on track with paying each bill timely. Now I can't do this with our garbage bill. They will only let you pay it in full. I just know we need to set $XX aside each pay period for garbage. 

3. Are you living within your means?

Once you break it all down do you have any extra money left? If you are in the negative then you need to figure out what you can eliminate. If you are living on credit cards that is a bigger problem. 

I truly believe you need to live within your means. That means being able to afford your lifestyle with the money you are bringing in. There are plenty of times I would much rather go out to eat then cook, but I also don't think putting that on a credit card is a good idea. 

4. Are you planning for the future?

Are you putting money into a 401K or IRA? This is a VERY important thing to be doing. Art is older than me and will be ready to retire in the next 10 years. When I met him he had very little set up for retirement. I had him increase his 401K contributions right away. Over the past 14 years it has really added up. We don't even consider that money. The money is taken out of his paycheck each pay period and put into his 401K. Each year we increase the amount that is put away. 

I am not sure what the 401K rules are not, but back when I started working I couldn't contribute until I was 21. I was so annoyed by that. Here I was in a career and I couldn't even contribute to my 401K. The month after I turned 21 I started contributing. 

Time goes by quickly! If you don't start saving when you are young you will not start saving when you are old. Social Security might not be there for us when we are 67 or however old you will need to be to collect it. 

We all like things. There is nothing wrong with that. I just feel for me and my family things we have to buy on credit aren't that great. I don't even get excited over a new car because I am like that costs so much money and I hate payments.