Having a budget is a critical way to keep your family’s finances in order. It doesn’t matter if you are Couponing to Disney, Couponing to Whatever or just Couponing to Coupon, you need a budget. There are lots of ways to make a budget, but here’s the easiest way I have found.
Step One
Take a piece of paper or a notebook and write down every single bill you have, the date the bill is due and the amount of the bill. It is best to put the list in order by due date (bills due on the 1st down to bills due on the 30th). Don’t forget the little things like Netflix, gym membership, etc. You might want to pull a couple month’s worth of bank statements to make sure you don’t miss a bill. Also for bills that fluctuate like power or water, write down the average amount of bill you expect to pay.
Lower your existing bills (more here)
Step Two
Write down the bare minimum you must have for groceries and gas. This is something that HAS to be bought, so make sure you know the amount you are going to need to have left out of each paycheck. For us, it’s $175 a week for groceries and gas. For others it might be less or more.
Step Three
Write down all your paychecks, the date you get paid and the estimated amount for the next 6 months. If you aren’t on salary, write down the average amount of the paycheck just be sure you don’t over estimate!
Step Four
On a new piece of paper, start writing down your paydates for the next 6 months and the amounts in columns. It should look something like this:
June 1st ($1000)
(skip at least 10 lines)
June 15th ($1000)
(skip at least 10 lines)
and so on….
Step 5
Start with bill #1 and write it under the paycheck that you will use to pay it. Write the amount of the paycheck that is left after paying the bill next to it. Like this:
June 1st ($1000)
Mortgage – $450 ($550)
Continue to do this for all your bills for the next 6 months. I know 6 months is a long time to think about, but you are going to feel great once you have this finished and you know how much money is left after you pay your bills.
*Also make sure you leave enough out of each paycheck to cover the minimum amount of gas and groceries that you are going to need to get through to the next paycheck. If you don’t have it, you need to eliminate some bills if you can. You don’t NEED Cable, Netflix, Cellphones (you can get prepaid like TracPhone), etc.
Option
My husband gets paid every other Thursday. Instead of taking our mortgage out of one of his paychecks, I divided it in half and take half out of each of his paychecks. Because he has 26 paychecks and we only need the mortgage taken out of 24 of them, twice a year we get what I call a ‘bonus paycheck’. It happens to be timed just before summer and just before Christmas. I pretend like that money is going to the mortgage and still deduct that amount out of the checking account, but instead I spend it on whatever we need or save it.
Be sure to check out all the ways to add to your fund and how to get your finances in order…
{ 22 comments… read them below or add one }
This is how i did our budget. I figured the amount of our monthy bills,estimated the ones like electric, take the total amount, multiply by, then divide by 52, this tells me each week how much has to come out of our check to cover all the bills, i also opened a free checking account at my bank and put the bill money in there untill one is due. The bill money comes out before anything and then i have a set amount for food, then a set amount for gas and xtra, and then for savings, works great for us.
That’s a smart way to do it!
We have a budget, but I want to try the multiply by 12, divide by 52 one, just to see if it is anywhere near what we are at. How would I go about that if I work 9 months a year– leaving the summer months with 1/2 the income? (I am *not* math savvy!)
thanks for posting
OMG! I just did the budget….and now I am wondering where has all my “extra” money been going???
The “B” word is a bad word in this house but we have one. Can’t I just call it the udget? That was not a typo either. I realized that we have several areas that need to change and I can only do them one at a time. Baby steps but I am doing it.
LOL, I like that! udget. =) Thanks for making me smile, and good luck with the baby steps! You can do it! =)
Thanks for sharing. How do I figure a commission that changes every month?
Is there an minimum amount that it is? I’d plan on the minimum if possible. Like if you look at all the commission checks from the past 12 months and you notice that it is constantly over a certain amount, I’d just plan on that small amount.
Like 242.13, 299.13, 255.13, 245.13…. it’s always over 242.00 :)
We live on commission pay and I average it out over the past 3 months or the lowest amount and anytime it’s more than that I transfer that to savings so if we ever have a really bad check that money can help out.
Using a spreadsheet, like MS Excel, will make this process a lot easier especially the calculations. Plus, I can type a lot faster than I can write and can can correct typos/errors easier, too.
Great post!
i did ours similar but did it in excel so i can adjust as needed. i get paid once a month and my husband twice, so certain things are attached to each paycheck. i also starting taking out $300 when he gets paid in cash for the envelope budget, just like kristin’s, and then we only use the debit card for gas. all other bills have been set up on auto pay. this is the ONLY thing that has worked for us for more than 4 months! everything has been paid on time and we still have money in the bank.
Jess,
Would you be willing to share a copy of your Excel spreadsheet to help me get started. I know how to put the info in the cells but not good at setting the catagories.
I love it! I do the first 4 steps already. I really like the idea about multiplying by 12 and then dividing by 52 for a weekly budget!
We already track our finances, but we haven’t been doing such a good job lately, and we don’t have a budget. Thanks for the post. It’s definitely got me thinking we need to do this.
One thing I will say, though, is that I think savings needs to be included in this as well, and I don’t mean last, after all the other bills. I don’t remember which financial expert said it, but I line I like is “Pay yourself first” … i.e., put money into savings before paying everyone else. Most people do it backwards — figure out all the other expenses and then save whatever is “left over”. The “pay yourself first” philosophy says that savings should be intentional, not a leftover. Blogs like yours encourage us to save intentionally every day, so let’s do that when making a budget as well.
I would suggest starting small, if you’re not sure what you can afford to save … say, $1 a week, or 2%, or whatever you’re comfortable with. Commit to putting that money aside very week (or month, or whatever), and then slowly increase. This is for creating your emergency fund, retirement savings, etc.
This is a great intro to budgeting! I do budgets for people on a regular basis, and there are places that tend to be forgotten about when setting a budget. The first is clothing. It is a necessary expence that is easily left out of the budget. Even grownups need to replace items periodically. I reccomend $25-50 per person per month. Often we don’t shop for clothing on a monthly basis, but spend perhaps a couple of $$$ during back2school, seasonally, etc. I personally total it up per year and divide by 12. I set the money aside each month in my misc savings account. Car repair and mantainance/ home repair are other expenses that I often see forgotten. When seting a realistic budget its important to include these “bills” as well. These are just a few of the cracks the money can slip through!
I do the same thing Liz! I budget a monthly amount for clothing, auto expenses and xmas and move it over each month to a free checking. When we need an oil change or my son needs baseball cleats or whatnot, we already have the money set aside. Same for xmas. I set aside a set amount each month. This way I can do a little shopping during the year too when I see a great deal. Budgeting is the way to go. It will give you total control of your money.
Love it! I just figured my bills times12 and divided by 52…wondering where all that extra $ goes!!!
I used software from http://www.daveramsey.com to do our budget. It was only $10.00 and I like to use the computer because it makes everything so neat ( I guess it’s a little OCD :) ) I never set out a paycheck by paycheck budget before so that was eye opening. Thanks for the info.
Would this be true for everyone being paid every other Thursday?
I have thought about doing a budget and trying to minimize it but my problem is that I don’t know how to come up with a food budget. If there is something on sale I may be a few packs, if its super cheap I stock up and when nothing is on sale I use what we have at home. So some months my grocery bill may be high but the next close to nothing. I figured I could track for a few weeks or months to average it out but its hard since I often shop at “super” stores and also purchase non food items. =0(