The only way you can save money is to live below your means. If you find yourself coming out short every month then you really need to write everything down and evaluate where you can cut back.
I'm still working on my budget, but I have most of everything down.
I start with my income, this is money that comes in. I have a house that I'm renting out, so I make a little bit of money from it.
Then I make a list of the fix expenses. IRA is in the because it automatically takes the money from my bank account and to me anything that leaves my checking counts as a expense, but that's just me.
| Fixed |
| Rent |
| IRA |
| Phone Bill |
| Life Insurance |
|
Fix-Variable. These are the areas that I need to spend money on every month, but the amount varies a bit month to month. Phone bill appears here too because I have the T-mobile $30/month unlimited internet and text with 100 minute plan. This is for those times when I go over those 100 mins.
| Fix-Variable |
| Gas |
| food |
| Phone bill |
| dog |
| household |
Variable- this is the area where you can absolutely cut off if you need to save money. If you have money left over after paying your bills and making allocations to your savings, have a little budget for fun.
| Variable |
| entertainment |
| Clothes |
| eating out |
Annual expenses- Don't forget about this, I list my annual expenses and divided into 12, then save that amount into an account every month under Misc expenses.
| Annual expense |
| car Insurance |
| Car registration |
| AAA |
|
Savings- If you don't have 6-8 months of living expenses then you need to cut off some expenses to save as quickly as possible for emergences. You see the account for Aunt? I took a personal loan from my aunt when I bought the house. I'm planning to save up and pay her back annually with a chunk of money
| Mandatory saving |
| Emergency |
| vacation |
| misc |
| aunt |
| Gifts |
| House and Baby |
I believe debt is a burden. I don't like to owe money (mortgage doesn't count). I carried a balance with Discover Card(best credit card ever) for the past 5 years. But, do as I say, not as I do. The only reason I can afford to carry a balance was because I keep asking for 0% interest on my balance. I don't ever recommend carrying a balance.
This is the budget that works for me. I hope this gives you an idea how to set it up.
No comments:
Post a Comment