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how do you budget?

404 Views 5 Replies 4 Participants Last post by  ccasanova
hey mamas! I would really like to start cutting back on our expenses. I just don't know how to go about it since I have never done it b4. I have never budgeted so I have no idea how to do it. I'm thinking of doing it like this. Please tell me if I'm on the right track. First I have to get dh involved. That will probably be the HARDEST thing!!! He and I have very different views on money. He grew up very poor so now that he makes a good amount, he seems to be on the "I deserve this because I couldn't have it as a child and now I can so I'm going to buy it" thing. Unconsiously most the time. I grew up down the middle of the road. I always had the nessesities, some luxuries. But I value $$$ so I am able to use my head and not just my desires. I have to admit though that now that dh is earning well, I am starting to spend more per item then b4. B4, I would buy the cheaper stuff, and not care that I wasn't in disigner clothes, makeup, houswares, etc. Now, I would rather have a few quality but more expensive items. Because I know that sometimes it ends up costing you more to replace cheap stuff, rather then investing more in something that will last. I am not however going straight to the designer labels. So, I guess first I need to-
1. get dh to view $$$ differently
2. make a list of what we find very important and go down to least important.(Organic food is very important to me, so I feel in my heart that I don't want to switch back to conventional food. My families health is more important then having more $$$)
3. after we figure out what we think is nessasary and desired, budget for the month.

How does that sound? It's the actual budgeting that has me confused. I have heard that we should pay ourself 10% first . Then should I think of how much we spend and if we have enough leave it at that? or should we put a number on what we think we shouldn't go over and then try to meet those goals? How do I determine what we should be spending? If you were to ask me how much we spend on different things, I would have no idea. I've never kept track. I just debit at the store, and balance the register when it comes time. And if we need to (want to) buy something that will bring us too low, we use the credit card. Although on the plus side we pay it off every month. We probably do dip into our savings sometimes though.
Which we are supposed to be saving for our 1st home. Maybe some seasoned saving mamas can give me some tips
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I think saving 10% is really important. Next I would start a little book and write down everything you spend money on. For bills that are regular, write those down. See how much extra money is left, and go from there. Maybe you could even use cash for extra stuff, so that you can see when it's gone (like eating oout, clothes, movies, ect.)
so I should keep track of what I spend for a couple months in order to see what we should cut back on? that way we will have that number in our head and it can make a bigger impact on us rather then just starting to save without knowing how much we are saving? that wow factor would not be there.
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Definitely keep track of how much you are spending on what for a couple of months. Also, be sure to consider all your once or twice a year payments as well. It sounds like you're not desparate to keep your monthly spending below a certain amount so you can just average those yearly payments into how much you would spend on them in a month and make it part of your monthly budget. Then you figure out how much you're making a month and set up your numbers so you aren't spending more than that a month (again, on average - so the month you pay your home owners insurance (or whatever) you spend a bit more, but the other months you spend a bit less). Does that make sense? I just use Excel to track everything each month. Good luck!
To budget, I use old fashioned pen and paper...

I write our income at the top.
Then come the non-negotiables. For us, this is our contribution to church and then the bills. Mortgage, utilities, debt payments (like car loan, student loans, etc), yearly tag fees for our car, car insurance, health insurance

Then, I list out all the categories for the softer categories: food, entertainment, gas for our car, vacations, gifts, clothing, etc.. I try to include everything I can think of--money for music CDs, magazines (listed under "literary")....

For these categories, I list out the money we are currently spending, then add it up... If it's over our income, then I start tweaking to make it fit better. Could I cut $5 here? $5 there?

Once I'm happy with the amounts, I have a working budget. We live on that for a month or two, then tweak as necessary.

So do you averege out the yearly fee stuff? or put aside for it throughout the year?
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