Give it a Whirl
I realized that my better half and I already participate in a few things that help simplify our lives. And this category will be a place to share some of those things. It will include tips, real-life examples, and reviews of things we've tried which might or might not of worked.
Today let's discuss The Budget (creepy voice, claps of thunder).
I know you're probably thinking "how is creating more work for myself count as simplifying my life?"
Trust me, the work up front will result in simple living later.
Why I like this budget (that I'm about to show you).
It's user-friendly. It's a simple Microsoft Excel template that does all the work for you.
You give every dollar a name. You work hard for your money, so it's a great idea to keep track of it and realize where it's going. This budget helps you do that.
It helps you be realistic. It never fails, I always imagine we spend less than we really do. I'm often appalled at how much things cost. Thankfully my better half handles our books. If I had the job we would be eating vienna sausages every night and reading by candlelight.
Let me walk you through the template monthly budget we use with an imaginary family (The Weebles).
Here is a snapshot of the top-half:
The first couple of rows are really important. You can start by putting in your projected income for the month, along with any extra income you might have. At the end of the month you will fill in the 'Actual Monthly Income' column.
Following that are major categories for each of your monthly expenses. Such as housing, transportation, food, savings, etc. You can feel those in based on your personal expenses.
For example let's look at the food category. Let's say the Weeble Family aliquotted $400 a month for groceries and $100 a month for dining out. They would type those values in the Projected Cost Column (circled in red).
Then at the end of the month, they would type in the actual amount they had spent in those two categories. (Column to the right) The Third Column shows you the difference between the projected and the actual cost.
So you would fill in all of your projected cost for the month. Then keeping track of all your expenses, at the end of the month you would fill in all of your actual cost columns. It's rewarding because you get to see how well you did and then keep track of areas you went a little Paris Hilton on.
For the summary, all of your 'Projected Cost' categories will be summed and then subtracted from your 'Projected Income'. This is your Projected Balance for the month. The same thing happens with your 'Actual Cost' and 'Actual Income' resulting in your Actual Balance. Then you get to see the difference between the two (circled in red), which allows you to make adjustments if your actual income is less than your projected (negative number). (The goal is a positive number)
Give it a whirl. It might be fun. And a warning: Give yourselves AT LEAST two months to get all the kinks worked out. Remember 'Rome wasn't built in a day'.
I have yet to figure out how to post files on here. So if you're interested in our template, just email me (email@example.com).
Dave Ramsey, a finical guru, likes to say 'have you ever noticed when you're broke, your life looks like a country song'. Isn't that so true? Sometimes I think we could write a whole album.
Keep your sanity (and your house), start budgeting today!
Pinching the pennies,
Other great ideas and resources for budgeting:
Happy Simple Living
A Good and Simple Life
Financial Peace University