Word to the Wise

When you go to spend money you need to look at what you have left in your budget and next do you have money in your bank account?  You shouldn't ever look at your bank account and say "I have plenty of money to spend", when you are over in your budget.  You will get yourself into a hole that you wish you would have never gotten yourself into.

Keep up a current check register.  I know that everything is online now, but you still need to know what hasn't come through so you will know how much you actually have to spend in your account. 

This might all be foreign to you but in the end it will bring you peace of mind and you will sleep better at night I promise!!!!!!

Saving Two Paychecks a Year

That is right and you all can do it.

First if you get paid every two weeks then this will be a little easier for you.  As you are using your budget you will find that you live on a monthly basis.  Each month you need the same amount of money but two months out of the year, usually April and October, you receive 3 checks.

From using the budget you will notice that these two checks become extra money and will go into your savings anyways.

What I suggest is to keep your very first 3rd paycheck in your checking account.  This will help make using the budget easier because you always have money in your checking account.  Another reason is you won't have to worry about paying overdraft fees on your account because there will always be money in your account.

This is also how you can get your emergency fund as well.  That money is there and will always be there so if needed for an emergency it will be in your checking account and then can be replenished slowly or when the next 3rd paycheck comes along. It might be that it takes both 3rd paychecks to get to your $1000 goal but you are working toward it and some emergency fund is better then none.

Lets say that you get paid on a weekly, semimonthly, or monthly basis.

For weekly I would suggest that you save every 5th paycheck that you get in a month.  It works out to be 4 months out of the year and will equal out to a  1 months worth of extra income.

If you are paid semimonthly (1st and 15th) there are a couple of ways to figure it out. For ease we are going to say that you make $1000 every paycheck.

1.  $1000*2 pay periods= $2000 monthly income
      $2000/24 pay periods= $83.50 (you divide it by 24 because that is the number of pay periods you have each year)

Total = $83.50 needs to be saved each paycheck

2.  This way is if you would like to save as much as someone that was getting paid every two weeks (less being saved)
$1000*2 pay periods= $2000 monthly savings
$2000*12 months= $24,000
$24,000/ 26 pay periods= $923.08 (this is how many pay periods in a year there are for someone who gets paid every two weeks)
$923.08*2 pay periods=  $1846.16 ( you multiply it by 2 pay periods because that is how many checks you will save in a year)
$1846.16/ 24 pay periods= $76.92 (24 pay periods is how many pay periods you have in a year)

Total= $76.92 needs to be saved each paycheck

If you are paid monthly I would save a weeks worth of pay on the months that have 5 weeks in them, you can also just save 1/5 of you check, or you can take your monthly income divide it by 12 and you get how much you need to save each month.

I hope that this is helpful to you and that you are able to save a little bit more than you thought was possible by having a budget.

Emergency Savings

Saving money isn't always an easy thing.  I agree it is hard and sometimes I would just rather buy something then save that money for something better.

What about those of you who live paycheck to paycheck, you try and you think "if I could get this bill paid off then I will be in a better place" but then another bill comes in to take its place and you aren't getting anywhere.

I feel your frustration and I am hoping that I can help.

First thing that needs to happen is get, what Dave Ramsey would call, an EMERGENCY FUND.  You are probably thinking "if I have no money to save how can I get an emergency fund?"

Answer:

Use your tax refund money or find an extra job do whatever it takes to get this.

It should be at least $1000 and this is why.  If you have one of those surprising bills more than likely you can pay for it with $1000.   Don't use this money to pay off existing debt, don't go on a trip, or find a really good sale, save this money.  It needs to be there when a real emergency comes.  Examples: furnace breaks, car accident, medical emergency, funeral, etc.

What will happen is that you will pay off your debt and be able to stay out of debt because of this fund.

Lets say that you used some of your emergency fund then you need to figure out how to replace it.  It might take a little time but keep it going.

You might find that your family needs more than this and that is okay.  You need to figure out what is best for your family and stick with it.  Budgeting and getting to a better financial wellness isn't going to happen unless you are able to do something that you and your family will be able to make work.   Also remember that this isn't going to be easy so don't give up because it is hard.  Hard things make strong people so don't let yourself stop.

If you are still having a hard time finding the money for an emergency fund don't give up hope just yet.  In my next post I will talk about another way that could get you back on track and would take less effort and stress.

How Do I Track What I Spend?

To affectively use your budget you need to track what you spend.  You might be thinking "that is what my budget is for" and you are right but the information has to come from some place.

Keep your receipts
       - easier said then done, right!  I usually keep my receipts in my wallet and then pull them out when I budget.  I ask my husband to try and keep his receipts as well but sometimes I never get them.  Things happen I lose them, the store doesn't give me one, or a number of other things. Below are some other ways to use as well to help.

Look at your bank and credit card statements
     - I also look at my statements throughout the month online.  This way I can stay on track and I also make sure that nothing fraudulent is going on in my accounts.

Write it down
    - if they don't give me a receipt I try and write it down on another receipt or at least where I spent money so I know what to look for on one of my statements.

Each month you will find something that you have forgotten to put into the budget.  Figure out what it is and see if there is a way to stop it from happening next month.

Lets say that your problem is when you spend cash, this was something I ran into, what I did was I took the money out of one of my categories and then when I actually spent it I didn't worry about the receipt.  It is really hard to keep track of $.50 for this or $2 for that.

Sometimes you just can't help that you can't find a receipt but don't feel bad try again next month and remember if you go over your budget it happens.  You probably would have spent a lot more if you didn't budget so look at the big picture, you are getting better.

Budget Instructions

            *As you are entering information don’t worry you can’t mess up the workbook.  I have protected it so all of the formulas and certain text cannot be changed.

1.     Open the Excel Workbook Small Budget 2011 or Large Budget 2011. Go to Save As and save the workbook where and what you would like.

2.     Click on the sheet (at bottom of page) that says January.

3.     You will see the green heading that says “January 2011” at the top of the page, right below is four blue boxes. In each one of the blue boxes you need to put in one of your list categories like food, gas, etc.  

4.     Right below the blue boxes you will see “Date & Place” in the box right next to it you will put in how much you have budgeted for the category that you have listed above it (in the blue box). Repeat this in the other long boxes (picture below).

      At the very bottom of each of the boxes you will see the total and next to it the same amount as you entered above.  As you enter in purchases this number at the bottom will get smaller to show you how much you have left in that category for the month.  This is the same for every other box in your budget.

5.     Below the four long boxes there is five smaller boxes with a blue section.  In each one of these boxes you need to put in one of your bill categories.  These should be your utilities, mortgage/ rent, phone, etc.

6.     Below those boxes there are 14 boxes with purple heading areas.  This is for your “first savings”, which is the savings that you will take out at the beginning of each month or when you are able to during the month.  In the “first savings” boxes put in things like car insurance, life insurance, oil changes, savings, anything that you will need to save for.

7.     Next go to the green box that says “Income”. This is where you put in any money that you have earned.

8.     Next to the Income box is “Withdrawal from monthly savings” you can put in purchases that you have made that you would have used your savings for.

9.     Go back to the heading January 2011 there is a box that says total budgeted, under budget, and total Income.  This will show through out the month how much you have budgeted for the month, how much you still have in your budget for the month (under budget), and how much income you have made for the month.

10.  Next to that you will see first savings, Extra savings, and Total Savings.  First savings is the sum of all of the purple boxes.  Extra savings is any money that you have left over, so if you are under your budget or have left over money that you don’t use from your income it goes into extra savings.  Total savings it just the sum of first and extra savings.

11.  Repeat this for each month, you can always go back and change any category later if you would like.

 12.  Next go to the savings sheet you will see "category" listed under the heading "Savings 2011".  Under category you will put in the categories from your first savings and any additional savings categories that you would like to have.  Example would be car insurance deductible.  You might not save for this each month because you already have all of the money there.

 

      As you enter the categories they will then appear below next to the “Date, What, and Amount”.  After you put in the category you can enter in the goal you have for each category, you can leave this blank if you don't have one.  At the top you will see the total in red.  This is how much you have in savings and should match your savings account. 

13.  Now each time you want to add or take away from you savings you would put it in your savings log. An example is if you were putting in your first savings for the month you would put the date under "date", under "what" you would put first savings, and under "amount" you would put the total amount of first savings. 

Then you would put in the amount that should go in each category under the category.  At the end of the row you will see a total it should match the amount you put in at the beginning.

      Lets say that to make things easier you decided that you were going to get an oil change and instead of moving the money from your savings account you decided to just take it from your "Withdrawal from Monthly Savings".  That will work just fine.  Below is a picture of how you would need to enter that into the savings worksheet.

     

      Under "What" put in Oil Change Monthly Savings.  Under "Amount" you would put in $0 because nothing is being added to your savings account, the money is just being moved from the Oil Change category to your Savings category.

14.  Next go to the Yearly overview.  What is nice about this is it just gives you a summary of what is going on in your budget for the year and you don’t have to enter in any information.  You can look back at it to compare how you did month by month.

If you have any problems you can always e-mail me or leave a comment.  I am more than willing to help you however I can.

 

Picking A Budget

I am selling two budgets, they both are the same, but one is just larger for those that need more space.

If you decided to do something on your own this can be a good example of what can be done and hopefully will help you create your budget.

The first budget is called "Small Budget 2011" ($10).  It is the smaller budget.  Below is a picture of one of the months so you can get an idea.

The 4 long boxes with blue headings are for your "List Categories", food, gas, etc.
Next row of boxes are 5 areas for your "Bill Categories", utilities, rent, etc.
The next three rows of purple boxes are for your "Savings Categories", life insurance, oil changes, etc.

This is how each month looks and at the bottom of the page you can see where you can click on each month.
Below is close up pictures of the budget so you have a better idea of what the budget has to offer you.

The budget also includes a Savings Worksheet (picture is below).

With the savings worksheet you will be able to keep track of each one of your savings categories.  This will be a great resource so that you will always know where you are at with saving for each category.  It will also help with keeping track of when and what you spent your savings on.

The last thing that the budget has is a Yearly Overview.  This worksheet is great.  You don't have to fill in any information on this page you can just go and look at it to assess how well you are doing with your budget for each month and for the year.  Picture below.

The larger budget is called "Large Budget 2011" ($15).  Below is a pictures of what it looks like.

This budget gives 7 areas for your "List Categories"
14 boxes for  your "Bill Categories"
21 boxes for your "Savings Categories"

*For bigger pictures of the larger budget just refer to the smaller budget they are very close, the larger one just has more lines.

Once you have decided on which one you can purchase the budget at the right through PayPal.  After you have paid you will get an e-mail in 1-2 business days with the budget in it.  Come back to Budget Buzz and follow the rest of the directions and you will be ready to budget.

If you would like, look over the next couple of posts which give the complete directions to the budget.  This should answer any questions that you have about it. If you still have questions leave a comment or e-mail me your questions and I will get back to you as soon as I can.

How to Get Started

The first thing that you need to do to start a budget is get all your numbers together.  What I mean by this is make a list of everything you spend your money on.  Like food, rent, loans, etc.  Below is a list of things that I have come up with, you can also go to Davey Ramsey's "Total Money Makeover" book in the back he has worksheets and it lists a lot of the same things and more.

Savings ____________

Emergency Fund _____

Mortgage ___________

Home Repairs ________

Electricity ____________

Water ______________

Gas ________________

Phone ______________

Cell Phone __________

Trash ______________

Cable ______________

Grocery _____________

Restaurants __________

Car payments _________

Gas/ Oil _____________

Repairs/ Tires ________

Car insurance _________

License/ Plates ________

Clothing ______________

Health Insurance _______

Copayments ______________

Dentist _____________

Prescriptions ________

Life Insurance ________

Baby-sitter ___________

Toiletries ___________

Cosmetics __________

Hair care ____________

Retirement ___________

College Fund ___________

Education/ Adult _________

School Supplies __________

Subscriptions ___________

Gifts ____________

Organization Dues ________

Entertainment ________

Vacation ____________

Credit card debt ________

Student Loans __________

Other Loans ____________

Next you need to make sure that each one of these categories is divided up into monthly payments.  Then you need to figure out which ones you need to save for.  Example, lets say that you pay your car insurance every six months well you would divide that amount by 6 and that is how much you need to put away each month to save for your car insurance.


The goal is to make sure that you have accounted for everything, now when the car insurance comes due you aren't trying to figure out how to come up with the money or have to make monthly payments which will usually make your premium more.


After you have divided everything up total it.  This is how much your family needs to survive for a month.  Now ask your self a couple of questions.  Are we making enough money?  Are you being realistic with how much you spend on food or gas?  If you aren't making enough money you either need to cut in a couple of areas or you need to figure out a way to earn some extra so you can cover your bills.


Sometimes it is hard to know exactly how much each category needs to be until you have been doing your budget for a couple of months.  You might find that you spend more or less so it is okay to change the amount budgeted.  But once you have figured out that magic number don't change it each month try to stick to it.  This will help you save more.


I want you to take your categories and classify each under one of the following: Savings, bills, and list items.  Savings would be anything that you need to save for: life insurance, car insurance, sam's club membership, monthly savings, oil changes, etc.  Bills are mortgage, utilities, loans, credit cards, cable, phone, etc.  List items are items that need several lines to list everything you bought in the month like food, gas, house hold items, clothing, children, etc.


Once you have this done you are ready to start your budget.  The next post I will give you step by step instructions on how to use my personal budget.  It is for sale in two different sizes small ($10) and large ($15).  It gives you 12 months, savings, and a yearly overview all in an excel workbook.  If this is something that doesn't work for you you can always make your own.  You can find a software program, make an excel spreadsheet, use pen and paper, or the envelope system (you just write your categories on an envelope and put your money in each one.  Once the money is gone you can't spend anything more because you don't have it.)


Remember the goal is to be successful at budgeting so do what works for you.  Sometimes starting off really simple works the best and then as you become better at budgeting you can add to it or purchase something more complex that fits your needs.


Good Luck!!!!

Why You Should Budget

        Budgeting is important because each person should be able to know what is going on with their money.  You might be doing well without a budget but you will do better if you have a budget.  Having a budget gives you the ability to save more money, track what you actually spend your money on, and gives you the peace of mind that you are on track with your financial goals.

          You might still disagree with having a budget and usually you don't start a budget unless something is going wrong with your finances.  But the important thing is you are reading this and that means that you will change the way you managing your money.

There are a couple of myths or what I would say are myths that I have heard from teaching budgeting classes or just talking to people individually about budgeting.

1. I can't afford to budget right now or my income is inconsistent so it would be too hard
              If you are saying this you needed to start yesterday!  I remember saying this when we should have been budgeting.  When I went back and looked at what we had spent on food for the month it was $100 more then what we had been spending with a budget.  My point is that when you budget you spend your money in a more effective way and are able to focus on spending it on more important things. 

            When people say this to me I am thinking you either have a lot of bills or you aren't making enough money.  First if you have a lot of bills budgeting will help you to pay off your bills sooner, again because you are spending your money in a more effective way.  Second if you income is inconsistent it can be more stressful to budget but just because your income is inconsistent doesn't mean that your bills are.  You still have to buy food and get the things necessary to live.  If you had a budget you would make sure you aren't overspending and you would know exactly how much you need to bring in to cover the needs of your family.

2. I will have to give something up.
           You really don't.  Usually if you aren't budgeting you are spending money on things you wish you wouldn't have.  If you were to budget you might actually have more money to spend on the things that you love.

           Sometimes this is not the case and you have to give up something so you can pay off a bill or live within your means but the great thing is you are making your budget so you get to decide what you keep and get rid of. 

3. I am too old.
           You are never too old to start to budget.  It is really important that you have good control of your fiances when you are older because you might be on a fixed income and aren't able to make more money.  Another reason to be wise with your money is because illness can come and you might need the funds to help pay doctors bills.

4.  I am too busy or it takes too much time.
           It does take time to budget but it is time well spent.  Don't cheat yourself by not budgeting because you feel like it takes too much time.  You will feel at peace once it is done and the stress of financial worries will be gone. 

          Budgeting gives you the freedom to not live paycheck to paycheck it doesn't matter how much you make.  It will help you to build wealth so you are able to achieve your financial goals in life.  You don't have to be one of those people that are really tight with their money if you budget.  You just have to be the kind of person that feels it is important to have control over your money and not let your money control over you.

Welcome!

This blog is going to talk about budgeting and everything that you might need to be successful at it. It can be hard to start budgeting and my hope is that this blog will help you stay motivated and on track so that you can save money and improve your overall financial wellness.

Please feel free to leave comments or e-mail me your questions and I will answer them to the best of my ability.