Family, Save some Cash

The Not-so-scary world of Budgeting

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Happy Wednesday y’all!!! I sure hope springing forward didn’t mess you up too much. It definitely wasn’t the greatest start to the week in our house. If your week isn’t going well, I sure hope it gets better soon.

This week we are finishing our budget talk. But this time it’s a little bit more detailed and in depth so, prepare yourself for a good long post. You’ll hear a little about my money managing past and I’ll let you know what I’m doing now that is making my life so much less stressful. I’ll also include links to other blog posts that I found helpful for me. Now if only those dishes and that laundry would just do itself, am I right?!

Budgeting Image

I’ve not always been keen on the idea of setting a budget. Up until around October 2017 having a budget was the equivalent of a 4-letter word to me. I had other really effective ways of managing things to ensure that we never missed a bill or had too low of a balance in our account. But somehow I still kept wondering where the heck all our money went. It was very frustrating.

If you’re feeling the same way and are interested in seeing why and how I made the change to having a set budget and how its been working out, please keep reading!

When I was younger, (pre-marriage) I was really not that great at managing my money. At ages 19-22 I had some pretty decent paying jobs and should have been just fine. However at that age, I was all about hanging out with my friends and hadn’t yet grasped the idea of saving or anything like that. As mentioned in my last post there were times I’d choose going out over paying my credit card or even sometimes my rent. (not a proud moment) I had lived on my own since the day after I graduated high school and, of course, thought I knew everything. I was living in an apartment with 5 other people and multiple different couch crashers and I thought I was living the life. Pretty quickly I realized that wasn’t quite the case. Bills happened, cars needed gas; it was a big old mess, even if it was fun at the time. Somehow, some way, I made it through relatively unscathed and eventually moved back in with my mom. When my husband and I got married in 2004, I had learned quite a lot about money and credit and how not to use your credit cards and all of that. Getting married threw in a whole other wrench into the mix. Not only did I have to manage my money, but now I was combining finances with my husband. Pretty early on we decided that I would take care of the finances and we bought a program called Quicken to help me do that.

We’ve been using it ever since

It has always worked really well, and we’ve never had any problems with it. Think of it as your checkbook register (does anyone still use those?) to keep track of your money in your bank account. It keeps you from falling into the trap of thinking what your bank says you have in your account is actually what you have available. So lets say your bank app shows that you have an available balance of $1000 but you know that you just paid $300 worth of bills and they haven’t cleared your account yet. You don’t move forward like you have the full $1000 to spend on stuff, you move forward thinking “ok, I have about $700 to spend”. Quicken does all of that for you. You just input your paychecks, your bill amounts, and purchase and it lets you know what you ACTUALLY have available to spend. But within the last year or so I’ve been really having the thought of, where in the world is all our money going. Our bills are ALWAYS paid, but somehow it just felt like I couldn’t make anything else happen. I was overspending on food because I wouldn’t always make a meal plan and grocery list and would make multiple trips to the store. I’d stress over going to family events because I wasn’t sure we’d be able to make it work. (It usually did but still) So clearly, something needed to change. So after a really sort of, eye opening sermon on Malachi from our NM pastor, I realized that I wasn’t honoring God with what He had given us. This is what our pastor said,

100% of all money you receive belongs to God. He only asks for 10% and asks us to be stewards of the other 90%. So honor Him not only with what He asks for (10%) but also with what He leaves you in charge of. Be a thankful, cheerful giver. If we honor Him with what we do with the 90% He will entrust us with more. It’s not about the money to God, it’s about how we choose to honor Him who blessed us with it in the first place”.

Yes we always gladly gave our 10% but what hit me hard was, that I wasn’t being a good steward of what was left after tithing. I was just letting it fly out all willy nilly and not “telling it where to go”.

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For quite some time now, I’ve been intrigued by Dave Ramsey’s Financial Peace University but never really wanted to invest a lot into taking the class. So to Pinterest I went, in search of a post that sort of lined out the same key principals that he teaches in that class. (Always trying to save money y’all, lol) I was pleased with my results and when I decided enough was enough, I started implementing a full on budget with the same key principals lined out in FPU. (Please don’t think this is me saying not to take that class, I have just chosen not to at this point) First step, find the best way to write everything down.

For days I searched, looking for just the right budgeting tool.

I thought about how my mom lines out her budget and while it works wonderfully for her, my brain really just needed something more. I could’ve done it the way my bestie does it but again, I needed something different. Neither one of these ways is wrong at all, it just wouldn’t have worked for me. I finally found this budget binder on Pinterest and it is very detailed. (Who knew I was as detail oriented as that) It’s got a place for EVERYTHING I could possibly set money aside for. Not every blank space gets used but the important thing is, that it makes sense to me. Remember y’all, it doesn’t have to make sense to anyone else. This is key, you have to find some way of budgeting that makes sense to YOU or it won’t stick. It doesn’t matter if it makes sense to anyone else if you’re the one taking care of the budget. Don’t let anyone tell you it’s not right just because it’s not their way. So the one I found unfortunately was not free but it had everything I needed so I bought it. No regrets!! I did decide that I didn’t want to print out the monthly planner so I don’t use that part. Instead, I just went and got a planner, so if I needed to I could take it with me wherever I went.

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You’re probably wondering where to start, so did I.

I could’ve started with our bank balance, but that changes pretty quickly. I could go by what Quicken was saying but, in the end I just found it much simpler to start with the next paycheck we got and go from there. On the “Expenses” sheet I added a few little spots to put the budgeted amount of the paycheck as well as the actual amount of the paycheck. Sometimes there is overtime so it might be different. Then I split all our expenses up by pay period. At the top of the “Expenses” page is a place for the dates, which start the day the paycheck hits our account and end the day before the next one comes in. Our rent, utilities, car insurance, credit card payments, all of it is split by pay period. I also have a couple of spots where I account for cash I take out. This cash is used for those coffee runs when the stuff at home just won’t cut it. You always need a little cash to use at your own discretion. Use it for a secret gift, or that quick 1 item run to the store. We also set money aside for life insurance and our HOA dues on our home in TX, each pay period. This way when those come due again, I’m not scrambling trying to figure out how to pay them. These 2 amounts are put into a separate bank account where they will sit until they need to be used. (I’ll get to how our accounts are set up later) The reason everything gets split up is so it doesn’t all come out of one paycheck. I do my best to make sure to schedule all payments the day the bill comes in so I don’t forget about it when the due date comes.

~*~For bills that have a constant amount and due date, just go ahead and set up repeating payments. but don’t forget to add them to your budget.~*~

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Lets use this example for why you split up the payments. You get paid $1200 each pay period but your rent is $600/month. If you split that $600 into 2 $300 amounts from each pay period, you’re left with $900 each pay period for everything else. If you didn’t do that, you’ll have $1200 one pay period but only $600 the other pay period. I hope all of that makes sense. I started doing this with car payments first and actually would pay the half payments to the loan company making sure the 2nd payment was always on or before the due date. This not only worked like I said above but also sort of cancelled out some interest and allowed for a bit of a quicker pay down on the car note.

One of my favorite things about the expenses page is the “Other” lines in each section, in case you need to add anything in. On mine, one is for setting money aside for essential oils, another was for our $1000 emergency savings, but it is now fully funded!! Then the others are for credit card payments. Remember, saving money and budgeting isn’t about depriving yourself of something you want. Its about looking for the best deal you can get while still having a quality product. It’s also about not purchasing something just because its on sale. If you didn’t need it before it was on sale, you don’t need it now that it is.

There are many sections to this lovely binder of mine but I’m only going to touch on a few.

Two sections that I enjoy in this binder are the Debt and the Savings section. I have a couple of “Notes” pages at the front of each of these sections for ideas on how to pay down certain things or how to save for certain things. In the Savings section I have several “Savings Goal” sheets for things like emergency savings, HOA, life insurance, vacation and essential oils. Each sheet lets you put the goal you’d like to reach and then you can split that up into pay periods to see how quickly you can reach that goal. Each time I put money toward that goal, I highlight it to show that it has been done. I also add extra money as I can to help meet or exceed that goal. For my essential oils, I don’t really transfer that money anywhere, I just set it aside on one of these sheets and keep a running total. When I use some of it, I notate that in there as well. This way I always have money for oils when I need to order more. The Debt section is a little different. Here you put the current balance of your debt and then list & highlight each payment as you make it. You don’t necessarily need to include interest here but you certainly can to help you keep more accurate track of how quickly you’re really paying it down. Now don’t forget, its not only credit card debt we’re talking about here, I mean car payments, house payments, loans, whatever. Pay them off y’all.

Here is where the “Debt Snowball” comes into play. Some don’t agree with this method and thats totally fine. I personally am a HUGE fan!!

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StartingEarly.com    This post even goes into more detail!!

I hope that you can tell from the above picture how this is done. Dave’s strategy is to choose the lowest debt you have and pay that off first. Still making sure to make minimum payments on all other debts. The idea is that it helps you build momentum. Once one debt is paid off you move that payment to the next one in line. In the example above, they moved their $130 payment from debt #1 to debt #2 to make that new payment $180. At the end of this example you now have an extra $630 to put in savings to start building your 3-6 month reserve. This reserve is essentially 3-6 months worth of living expenses saved just in case someone gets laid off, or has to take time off of work for whatever reason. Make sure to include ALL expenses that you would list on the “Expenses” sheet if you’re using the binder I use. Otherwise include household expenses, groceries, car expenses, pet expenses (if you have them) all of those regular things.

My apparently detail-oriented-mind really enjoys how everything is laid out in this binder, she did a great job. It just all makes sense to me, and like I said before, if it didn’t make sense to me I wouldn’t do it. I would have given up months ago, but here I am almost 5 months strong and loving it. The freedom it gives once everything is told where to go is something I really enjoy.

I mentioned a little earlier that I’d tell you how our bank accounts are set up. Yes I said accounts, you’ll understand why very soon.

Personal Checking

This account is where my husbands paycheck comes to visit. I say visit because it doesn’t stick around long once bills and stuff start coming out. It’s also where the distributing starts for the most part. Paychecks come in, things go out whether to pay bills or to save money for various things, or to ensure that when things are due each year its already fully funded and ready to go.

Personal Savings

This is where our $1000 emergency savings lives. A portion of our tax return lives here as well. Slowly building toward our 3-6 month reserve. It’s so, so nice having some money set-aside just in case. It’s such a blessing to have some savings.

2nd Checking

10 years in the military was a bit rough on my hubby. We thank God everyday he never experienced what some veterans experience with disabilities; but he did endure some minor service related things. These qualify him for the opportunity to be given money from the VA each month. This is where it lives, mostly. My car payment comes out of this account so it does get used. This is also where one of our credit card payments comes from. Each month, money is transferred from our personal checking account, here to make that payment.

2nd Savings

This is where our HOA dues and life insurance premium money hangs out. I transfer this money from our personal checking account. Each year those things then get paid from here as well and the whole process will start over again.

3rd Checking

This account is where our tenants rent payment comes to. That payment gets distributed where it needs to go every month. We call this our TX home account and only use this money for expenses related to it. (ie: mortgage)

To some it might seem a little excessive to have this many bank accounts. But if you look deeper into FPU you see that Dave actually recommends using what’s called the “Envelope Method”. I personally prefer to pay most, if not all, of my bills online. Not everyone feels the same but this is my preference. It just didn’t make sense to me to just carry cash for everything. So think of the above accounts as a way to implement that same kind of idea. I’ve found this incredibly helpful. I shocked myself by how much I really enjoy my budgeting days. It makes me feel like I have gained back some semblance of control over our finances. It’s empowering to know that I’m now being a good steward of this blessing. He’s given me the tools that I needed to move my family forward in the journey we are on. Now, I’m prepared (or at least can be) for whatever may come our way. I’m so thankful that I chose to listen to God this way. His ways are far better than my own and I’m learning that more each day. I’ve learned to trust Him far more than I ever did before and there’s no looking back now.

Here are some links to posts that helped me.

How to start… setting financial goals with your spouse.

FREE PRINTABLE BUDGET BINDER: OUR SECRET WEAPON FOR SAVING MONEY

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Whew….. did you make it through the whole post? I warned y’all before it was a long post but MAN!! I think we should reward ourselves with some snacks.

If you stuck it out, God bless you!! I just really didn’t want to leave out anything that I thought might be helpful. I really hope you enjoyed the whole thing and got some helpful info and tools to begin your own budgeting journey. I’d love to hear how these tips have benefitted you OR if you’ve found some things that work great for you.

Share your thoughts, comments or successes below.

 

As always don’t forget to follow me on Facebook, Pinterest or Instagram.

Have an amazing day y’all, see ya next time!!

Ruth 1:16 ~ But Ruth replied, “Don’t ask me to leave you and turn back. Wherever you go, I will go; wherever you live, I will live. Your people will be my people, and your God will be my God.
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