Disclaimer: I was not paid or even asked to tout Dave Ramsey's info. We're just DR fanatics and I love sharing the knowledge!
Here we are, Part Two of my Debt Free series - Monthly Budgeting. This is where you'll have a view of your money every month. He explains this further in the book The Total Money Makeover but I wanted to let you know how we do it each month at the beginning of the month.
Here's a little photo of our budgeting sheet. It's obviously edited but you don't need to see the numbers to know how it works. I'll explain things as we go!
First, we list what we made that month. Or rather, what we made the month before considering that's the money we can now spend. This is in the first section by the black arrow. Here we have categories for income: Brandon, Chantal, gifts/rewards, tax return, personal sales. Usually Brandon's row is the only one filled, but sometimes we get lucky and have other stuff! So here we list under each month how much was made so we know exactly how much to budget.
Next, we fill in everything!
Let's start with the red arrow. This is where a large chunk of our money goes. The first block of stuff are our bills - internet, Netflix, Brandon's loan (paid off! woo!), etc. Monthly stuff. Once that's subtracted, we go to our "Sustainment" block. This is stuff like groceries, beauty care, pets, gas, clothing, baby stuff, miscellaneous. If you can think of a category for stuff you spend money on every month, stick it in there! The final block is "Extras" which includes fun money, alcohol (maybe that should be in sustainment...?), gifts, and our personal "blow money."
What's Blow Money? It's a silly name, and no, it's not for drugs or... other stuff. It's to blow on anything you want! We each get $50 a month (budgeted according to our budget, do what works for you) and we can spend it on whatever we want, no questions asked. Of course if we need more, we discuss it.
The green arrow points to our "special circumstances" block. This is for stuff like PCSing, which is in its own category, and buying other stuff that doesn't happen often but requires more and a way to keep track.
Still following me?
While doing all this, we also fill in the blue arrow block.
This is more important than budgeting our money! This is our house fund, both our IRAs, and Penny's college fund. We make sure to put in a certain percentage every month to sustain these accounts. This little block is the money that will hold us over when we're old and wrinkly.
Finally, what do we do with the leftovers?
You will have leftovers. Be smart with your budget, don't put in $600 for groceries if you're not going to spend that much. It's taken us some experimenting but we're pretty solid in our amounts every month and usually it doesn't change. Remember, you need to keep track of every cent. So see how much you have left over and check out the final block with the gray arrow. That's money for future purchases. I have a row, Brandon has a row, we have a car repairs row, and currently, a camping gear row. We want to buy some camping gear in the future! My money will most likely go to a new car. Brandon's to some gun stuff or car stuff. But this money is being saved up for some near-future purchases.
This is how we saved for our trip to Australia. And for R&R last year. And for my pretty Nikon DSLR. And for my super duper awesome vacuum. It's possible!
At the beginning of the month, we pull out cash.
Yes, cash. We have pretty envelopes and we put all the money where it needs to go. The only thing we use our debit card for is gas. Mostly because we're lazy and don't like going into the store to pay! But that's the only thing. And yeah, you're pulling out a bunch. We learned you can pull out $600 a day per card from the ATM, so we hop in the car together and we can pull out an easy $1200 if we need to ;)
This all seems complicated but it's super easy. Brandon spent some time making this chart, but our budget sessions last maybe 15 minutes. We know what we need, we budget for it, and off we go! We don't argue over money anymore for the most part because it is what it is.
I feel like I'm forgetting some things... but since this post is so long as it is, I won't bother trying to remember for the time being! I'll leave you with just some advice. I hope this was helpful!
Remember, if you can't afford, DON'T BUY IT. Save up for it!