If you ever want an eye opening experience into where your money goes I suggest tracking it your spending in writing! This might seem tedious but it really can tell you a lot about your spending habits and also helps you take a long hard look what you need to do to help you become debt free and put money aside for the if’s in life!
When I first really started buckling down and budgeting I was trying to use an online tool that my bank offered and keeping track there but for some reason after about 3 months I realized I was constantly going over budget on many area’s and I was loosing track of different things and it wasn’t really helping me save. So being the stationary addict I am I purchased a cute notebook at TJ MAXX and started writing down things and creating a plan and a budget.
I wanted a pretty note book of course, because I was going to be carrying this around with me daily in my purse. This is also a really nice wide rule note book so lots of room for all the information I need to add into my budgeting. I also like that it’s got plenty of pages for when I update things or when I need to make changes. PS I got this as TJ Maxx!
Now for the Budget portion!
So the first step to setting up a successful budget it listing out all of your monthly bills; things like rent, power, car payments, insurance, credit card payments, etc. I like to include anything that I pay every month. On this page I also liked to list my current loans/ credit cards and what the current balance. This gives a nice over view of how much we have left to pay off debts.
One of my main goals with this budget book it so not only become as close to debt free as I can but also to put aside money into savings so that we have money for future use like vacations, emergencies, and even a down payment for a house of our own. I have made it my goal for the last 18 months to treat savings just as I do a bill and to act as if I don’t have that money at my disposal until either there is an emergency or a vacation. With that I come up on the next few pages in my budget book.
On the next two pages I have laid out the different credit cards or revolving lines of credit that don’t have a set pay off date. I also like to color code each page; the blue is what my ideal payment amount and payoff time frame will be, while the pink is the actual payment amount and pay off time frame. I broke each of these down by month. Because I started my budget book in April I only have the page split into nine sections which happened to work out perfectly for the number of lines on each page.
The reason I have the two different pages, “Ideal” and “Actual”, is so that I can work the idea numbers into my monthly budgets the best I can. The “actual” page is to keep track of the reality of where the balances are sitting as well as what I am actually paying and if I am meeting my ideal payment. If I’m not meeting that I deal payment I want to see why which I document later on in my book.
The next two pages are my savings goals! Again I have and “Ideal” and “Actual” savings page so I can again work the ideal into my budget and keep track of the actual in case something has come up on the month that required me to take money out of savings to cover things. One thing I have learned about putting money aside is to treat it like a bill every month and to only take from it when absolutely necessary. The other thing I have found helpful when saving is to have specific accounts set up for specific items. I personally have 5 different savings accounts set up including a house savings and an emergency fund for those unexpected things. This has come in handy when different things have come up. The easiest way I have found to treat saving as a monthly bill is to set up automatic transfers to each account that I either can’t change or that I factor into my bills budget.
I also like to keep track of what my over all balances are in my savings account and then a running total. I have found by having 5 different savings accounts I don’t actually notice how much we have set aside until I add them all up together! It’s a good way to play a trick on your mind and also to save for specific things!
I sometimes like to play with numbers and think about how much we would have after so many months if we put a certain amount aside and it makes me excited to think we can actually make that happen!
I always recommend having different savings accounts with different labels so that you know exactly what you are saving for and that stays the in the forefront of you mind.
Next up I like to write down pay days and what I calculate my pay to be and what I actually get along with my husband. I my self get paid monthly so this takes a lot of budgeting and this is the main reason why I started getting more serious about my budgeting. My husband just had a major job change and actually has gone from getting paid every two weeks to weekly so this has been a bit of an adjustment as well but with my budget book I have been able to budget a lot better. This also helps me to project my budget for the coming months and see if there will be extra on certain months or if we will have to keep things tighter the next! This also helps me to plan ahead for the shorter months or if we have a vacation or large expense coming up and it’s going to be a short month.
Next up is the actual monthly budget plan. I then set up something similar to my savings and debt pay down pages. I have the top section listed out in the “Allotted” amounts for each bill or expense for the month. I then list on the bottom the “Actual”. For me I work best with rounded numbers so that is what I list in my “Allotted” section. Some of the amounts might actually be as easy as the allotted amount where as other might be more or less. For example I a lot $100 for our power bill each month but most often for 8 months of the year it’s less than that. So when I budget more then I know I have a buffer so everything can clear my account and I won’t have any issues with thinking I have more than I actually do.
On the next page I list out my expenses. So I have broken this down into 6 categories (Coffee, Gas/Fuel, Groceries, Shopping, Hobbies and Restaurants) to not only make it easier for me to keep track but also for simplicity. For each category I go through my bank account once a week and write down all of the different transactions that fall into each category. At the end of the month I add up each category and put in the total on the previous page in the “actual” spot for expenses. This is probably the most eye opening part of my budget when I see how much I truly spend on coffee and shopping. I couldn’t believe it and I definitely have been making some changes. Which brings me to the last page I have for each month which is the monthly budget analysis. Here is where I make comments on why things plaid out the way they did. I notate where we did well and I notate where we need improvement. I also keep track of how well we are doing saving and if we were able to put extra away and I also notate how our debt pay down is going. This is a way for me to go back from month to month and see what happened where and what needed to be changed for the coming month.
As time goes on I also like to right out different savings budgets and different area’s where we can save more for a particular big purchase or what our bills would look like if we were making a larger payment in one area. By having this note book it’s really nice and easy to keep track of it all and has really helped my husband and I save and pay down debts.
This has been so eye opening for me as to where some of our extra money goes in a month. I highly recommend sitting down and doing this for yourself because it doesn’t totally sink in until you write down the numbers! So far I have been doing this for 4 full months and I can say this has given not only the ability to have a stacked emergency account but also to pay off a few debts!
Please let me know if you have questions on how I go about budgeting or if you have other helpful ways of tracking you budget/ spending. I also like to look for new ways to keep up and better prepare my husband and I for the future!
Thank you for stopping by and keep an eye out for what might be up around the curve!