Monday, September 12, 2016

Zero Based Budgeting

Throughout my no spend September month, I want to try and educate about finances. I'm a former spender, and I've come along way. 

Why create a budget? Every wonder where your money went at the end of the month? If you have a budget, you keep track of your spending, this will be a thing of the past. Budgeting is being in control of your money. Have your money work for you, you work hard enough for it. It's easy to ignore your finances, but it's not going to benefit you in the short or long term.

When I first started budgeting, I only wrote down bills. I didn't include groceries, savings, or personal money. Now, I plan for every thing, including gifts that will come up in a month. One of the first things, that made me stop and hop on the Dave Ramsey wagon was when I heard him say Christmas shouldn't be a surprise. We know Christmas comes up once a year, plan for it. Now, I have a Christmas fund that gets funded monthly. 

1. The first step to budgeting, is write down your income. If you have a fixed income this should be easy. If you have a variable income, you should do some research to get some help.

2. Create a monthly budget of expenses. If you are in the red, make sure you have your four walls covered. Food, shelter (including utilities), clothing and transportation are necessities. They should be at the top of your budget, not at the end. These are things, you cannot cut out. Give every dollar a purpose. Have every dollar accounted for. This could be personal money, savings, sinking funds, money put towards your debt...

I highly recommend looking at examples of budgets online. Look at how detailed they are. Those details really make the difference.

3. If you have a tight budget, can you cut out some things? Gym membership, eating out, cable? This can be temporary, but getting on track is important.

4. Throughout the month, you need to check in with your budget. Don't write it down and forget it. Track your spending, and you will see where your money is going. You will also see if your need to adjust the budget. I like to use the Every Dollar App, because it's easy to look over when having budget meetings with my husband. 

5. Pay your self first. Move money into savings before you have a chance to spend it. Once it's moved over, leave it there! An emergency fund is important. This should be separate and only used in an emergency. It will rain at some point, be prepared. Dave Ramsey says to have 1000$ in a baby emergency fund when getting out of debt. We have a bigger fund, but that's what we're comfortable with.

Honestly, I love budgeting now. It's actually calming and makes me happy. I enjoy talking about money with my husband, because there's no guilt, no secrets. A budget doesn't have to be restrictive, just plan for it.  I feel so in control of my finances, and I see the big picture. Our future is so positive, and dreams possible. Money isn't only about the short term, look at the big picture. If you follow Dave Ramsey, or you don't... budgeting is still very important. Personal finances has really been something I've been interested in. Money is common sense, but people really struggle. Listening to Dave Ramsey, and people who are in SO much debt, it's really scary. Being financially responsible, is security and that's what I want for my family.

Once you believe that you can do it, you can stay on budget. You will.

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