Monday, January 05, 2009

Start a budget

This may seem obvious but you would be surprised at how many people do not have a budget. Make sure your budget is on an excel spreadsheet, word document, piece of paper or other computer program, not just in your head.

**Before I go any further I must confess that I never had a budget until I met my husband. He is anal with the budget. We update it every night. Everything must be recorded, even the 75 cents we spend at a vending machine. There is even a dead weight category for parking tickets and ATM fees. If it wasn't for the budget, I would not be able to stay at home with the twins.

Our budget:
If you already have a budget, you can stop reading, scroll down and look at the cutest kids in the world. If you don't have a budget and would like to start, I will describe how our budget works.
Our budget is on excel and my husband has all the bells and whistles on it: Formulas, charts, graphs, colors etc. The first thing you need to do is determine how much money you bring in each month. Our monthly income is my husband's paycheck after taxes, health insurance and 401k. Then create categories where you spend money. Our categories include:
  • Auto (gas, insurance, payments, car washes)
  • Home (Mortgage, rent, electric, gas, home improvements)
  • Connectivity (Cell phones, Internet, phone)
  • Debt maintenance (School loans, credit cards if any)
  • Groceries
  • Liquor
  • Entertainment
  • Eating Out
  • Medical
  • Charity (Includes church for us)
  • Misc. (Big category for us. Includes our trips to Target where I buy diapers, formula, cleaning supplies etc. This category could be broken down into smaller ones)
  • Clothes
  • Investments (IRAs, savings)
After your categories are established, you need to put a dollar amount to each category on what you can spend. The easiest way is to determine the bills you have to pay - mortgage, car, gas, electrical and so on. Then figure out how much you can pay towards your debt and investments. Whatever money you have leftover each month can then be divided into the other categories. Obviously give yourself more money in areas that are more important. For example, we establish our entertainment and eating out budgets last.

Your next step is projections. My husband has the spreadsheet project out a month. We then fill in the mandatory amounts and when they are paid. He has a running total based off of income and as we fill in projected payments it shows us what our balance will be. This is helpful when we schedule hair appointments or want to make a big purchase, we know when we can afford to do it.

Whew. Make sense?

Let me know if you have any questions. I'm going to try to get a copy of the spreadsheet up on the site so you can see what it looks like.


Anonymous said...

I would love to see a copy of it - how it is organized and everything. That way I don't have to start from scratch! :)


Katy said...

Ditto to see a copy/template. I'm not an excel guru at all, so if the formulas were in there that would be awesome! I'm so glad you're blogging about this...we need to start this!

Danielle said...

I would also be interested in seeing a copy of this! We have a budget, but I keep re-doing the format because I'm not loving it. I'm curious to see what other peoples budget spreadsheets look like, and to see if the format would work better for me :)

Tracey said...

I'll talk to the man and see if he can do a template. I think he has done this in the past.

ptg said...

I would love to see a template...while both DH and I are working, the truth is, money is still going out the door as fast as it comes in! And that's not good.

Jenny Moeller said...

The twins have the exact same expression on their faces. They are so adorable.

Kristin said...

Tracey, I've been following your blog since I went through IVF with Dr. Sherbahn. I am also from WI and now have 3 month old twin girls. I love the direction your blog is taking and look forward to learning more from you. Thank you!

sarah said...

Great topic! We have a budget that I actually got from a "money person" on the Nest. It's great, but my biggest problem is trying to fit everything into the categories--how do you do it? Like, if we go to Target or Walmart and I buy some things from the grocery area, some things from the baby area, and some things from the pharmacy, how do you piece them all out on the budget spreadsheet? Do you really breakdown every receipt? The way I was doing it was going through the past month in my checkbook to see all the debits, then putting them in the appropriate categories, but that's nearly impossible. What are your tips??

Tracey said...

great questions! I actually am done with a template.....I'll email this weekend to people's emails that I have, if you want it, leave me your email. I can always delete it off the comments later.
Next topic will be second hand shops.
Sarah, sometimes I do break down receipts if they are significant amounts. Especially Target because I buy groceries, clothes, baby stuff, medical items etc all at Target so I'll break down that receipt. If its a small amount then it all goes in Misc. Make sense?

sarah said...

Tracey, do you mind emailing me too? tosa28 at hotmail dot com. Thanks!!

Amy P said...

I would love to see a template of your budget. We really need to get started on one. email is akbrown6 at yahoo dot com. Thanks!

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