Budgets sound so boring! How do you set a realistic budget? How can you know your going to be able to keep it?
Budgets can be such a scary task. It is the first thing you are supposed to do when you move out of your parents house, or graduate college, or get married. However, not many people actually do it! In this day and age with so many ways to pay with credit, and pay without pulling out your wallet, it is so easy to spend more than you thought!
When creating a budget the first thing you need to do is think about the essentials: Rent (or mortgage), car payments, student loans, utilities, and insurance. Wait, what about food?! That is second since food could be a PB&J or going out for every meal. Add up your essentials. Now subtract that total from your monthly wages. (ex: If you make $4,000 a month, and your essentials are $2697, then 4000-2697=1303) The remaining amount is what you really have to work with for the month.
In the example above, you have $1303 after essentials. Most people can use about $100 per person per week for food. If you have a larger budget, you can spend more on food, if you have less, it might be hard to make it on less than 100 per week. subtract what you think you will spend on food. (1 person =about 400 a month, 1303-400=903). If this seems like a lot left over to you, or you are not trying to save up, recalculate with $150 per week. This also allows for some extras like, coffee in the morning, or going out to lunch with coworkers or friends. (150X4=600, 1303-600=703). I like to go out, so I will use this second number.
Now, we get to look at how to keep from spending all the remaining money. There are a few strategies I have heard of and tried.
1.To keep on track for food, take cash with you to the store. Also use cash for gas, fun shopping, and other things that come up during the month.
2.Keep a running notes sheet on your phone. Every time you spend money add it to the notes sheet. You can even make an excel sheet or google sheets on your phone, to help with the calculation (it’s like the modern equivalent of what my mom used to do with her check book).
3.Use your credit card, then check the amount due against your ‘left over’ money each week. That way if you need to go to the cash method for the last week of the month, you can.
4.Use a tracker to make sure everything really was paid, and keep track of how much you want to put away for different things (saving for a house, or a baby, or whatever)
I use this last method because it works best for our family. I use a bullet journal, so I made a tracker in my journal. I included a picture here, but I also made a PDF version so you can download it and make it work for your family (click here!). I write down the amount we owe or paid for the credit cards and how much we have saved. I then color in the boxes of what we have already paid. Like I said, this works for us, it doesn’t mean it will work for every family.