I was asked by a friend how we do our budgeting, so I thought it would be a great blog post! I’ll try to keep it short and sweet.
First of all, we love the teachings of Dave Ramsey and Financial Peace University. We cannot recommend him enough! Because of his wisdom the only debt that we have left is our student loans.
We maintain two spreadsheets: Our budget, and our “Special Expenses by Month”…
The first one is our budget. Every other Wednesday, I (Lesa) enter the amounts that are due for this pay period. We always budget to “zero”–meaning that every dollar is accounted for. We use cash for food, necessities, clothing, date nights, etc. so we pull out the cash on pay-day. The line items below often change based upon our needs for that pay period (i.e. if we need clothes, we’ll add that line item).
We have our spreadsheet set up to automatically calculate things, so once we enter our income (we usually know by Thursday morning all of our income for that pay period) into the purple section it tells us how much we are over/under budget so that we can adjust accordingly.
When you are trying to get out of debt, it is important to use any extra money that you have to make extra payments. That is how we paid off our credit card debt so quickly–it requires sacrifices, but it’s so worth it.
(Click on the image to make it larger)
And our Special Expenses by Month looks like this:
This spreadsheet helps us to never be surprised by a bill that is coming up. It allows us to plan for them and be prepared! It would make it very easy to total up your special expenses to divide by the number of pay periods per year so that you could save little by little, as well.
Because we get paid twice a month, we do our budget twice a month. However, you have to do what works for you! This has been such a blessing to us because we always know exactly what we have to spend. We pay all of our bills on pay-day for that pay period which also reduces time and stress because we never forget to pay a bill.
If you have additional questions, please let me know! Budgets are not constraining–they are truly freeing!