Creating a budget - rough

Erikan73 · December 2013

So for the past year I've been keeping a spreadsheet to track my expenses. This is my husband and mine first year of really working on combining our bills/income & tracking information and working on paying off debts. Well looking at the past 11 months it's ugly to look at. We need to work really hard at improving our spending/saving habits. I started the spreadsheet for 2014 to get ready for that and revamped our budget based on our spending habits of 2014. It's going to be very hard to stick but if we want to reach our financial goals, we have to. On the plus side is we are both getting bonuses this month and plan to use most of them to pay off bills, which will help get us closer to some of our financial goals. If I can be strict & make us stick to this plan, by time we hit our 5 year anniversary (in 4 years) or possibly sooner, we should be debt free not counting mortgage or car payments. With two cars in the family, I expect us to always have at least one car payment. I've seen plenty of you do it on here so I know it's possible, just have to stick to my budget and keep my head up.

Ducktale · December 2013

Congrats on an awesome first step! It's eye-opening, isn't it? I found that I had really no accurate idea of where my money was going. You can do it, and stick around for support and ask questions!

HoneyBee973 · December 2013

Even with two cars in the family, does not mean you have to have a car payment. My previous car was a 12 yr old civic with over 200,000 miles on it. Pay off your cars, take good care of them, and drive them till they break... IMO

Congrats on making the first steps, as PP said, its eye opening!

Xstatic3333 · December 2013

We are in a really similar place right now in terms of figuring out the budget we can really stick to. It's a learning experience balancing all of the different priorities. For example, we just severely under budgeted spending money for our trip to visit family in FL over the weekend. This will compromise our savings goals for the month, but I plan to get right back on the horse and budget better the next time we travel.

Best of luck following your new budget. I know we can both do it!

Erikan73 · December 2013

HoneyBee973 said:

Even with two cars in the family, does not mean you have to have a car payment. My previous car was a 12 yr old civic with over 200,000 miles on it. Pay off your cars, take good care of them, and drive them till they break... IMO Congrats on making the first steps, as PP said, its eye opening!

Ideally I would like to do that but the models of cars we drive don't have the reliability that other cars like civics and corollas have. Right now we are down to one car payment and I have continued to put the monthly car payment away in a separate account. This way we have money for a downpayment on the next car, or for repairs when needed. When the time comes we willl have to look into cars that have a history of lasting longer.

Sisugal · December 2013

Understanding your situation is the first step to changing it. Congratulations on taking the first step.
Cars - when you do buy, put as much as possible down, buy a slightly used historically reliable vehicle. Finance no longer than 3 years -- always. If you cannot afford that payment, you are buying too much car for your budget.
Saving - comes off the top first - consider it a bill that MUST be paid.
Congratulations on the bonuses going to debt.
Seriously cut back on non essentials.
Look at what you have that you do not need or want -- sell it on e-bay, craigslist or resale/consignment shop;
Get second PT jobs and apply that money to debt.
Wishing you a happier, financial new year!

Sisugal · December 2013

Understanding your situation is the first step to changing it. Congratulations on taking the first step.
Cars - when you do buy, put as much as possible down, buy a slightly used historically reliable vehicle. Finance no longer than 3 years -- always. If you cannot afford that payment, you are buying too much car for your budget.
Saving - comes off the top first - consider it a bill that MUST be paid.
Congratulations on the bonuses going to debt.
Seriously cut back on non essentials.
Look at what you have that you do not need or want -- sell it on e-bay, craigslist or resale/consignment shop;
Get second PT jobs and apply that money to debt.
Wishing you a happier, financial new year!

hoffse · December 2013

Good for you for tracking it that long! I remember how appalled I was the first time I tracked mine. It's eye-opening and rarely in a good way!

My suggestion here is to make sure you come up with a budget that's sustainable. I really believe financial planning is similar to losing weight - it's a marathon, not a sprint, and it really takes lifestyle changes. I don't know about you, but I could never keep up with a diet that cuts out sugar and bread. So don't deprive yourself TOO much or you risk falling off the wagon. 4 years is a long time.

That said, take a hard, honest look and ask yourself WHY you feel as though you are bleeding money. Then see if you can't "fix" whatever is causing it. For instance, I tend to spend money on impulse buys because something's a good deal, or I run into something in a store and think that it's a good idea to own that thing (in theory). Yet, when that new thing makes it into my house it usually sits in the packaging for a month and a half until I actually find a use for it. So I've tried to address that by keeping a list of items that I wish I had as I think to myself, "It would be great to own ____." If it's not on the list, I try not to buy it. And if it is on the list, that gives me something to bargain-hunt for. The result is I spend a lot less, and my new things get far more use.

Erikan73 · December 2013

That is a problem for us, impluse buying, especially on things for the house and tools. But we have become better about it. I did allot $25.00 a month for entertainment. That doesn't seem like much but I figure that gets us 1-2 movies nights a month if we go on $5.00 movie night which we have no issue with doing. I also allotted $50 a month for dining out. Some people would probably say don't eat out, but not to eat out at all is going to make us miserable. But this will cut us down from 2-3 times a week (another expense issue for us) to 2-3 a month if we use coupons. Speaking of coupons, going to try to use those more to help with food budget. Thanks everyone for the support!!

hoffse · December 2013

Eating out is a big one for us as well. I work literally next door to a mall - as in, we share a parking deck - so eating at the food court for lunch is a huge temptation for me. I try to avoid this by planning my meals over the weekend - and either getting leftovers ready (crock pot, etc) or else freezing sandwiches, etc. I simply won't make lunch when I wake up in the mornings, so it has to be pretty effortless if I'm going to avoid the food court. I do typically allow myself a splurge at the food court now and then. I try to avoid going more than once a week.

You might already do this, but for a $25/month entertainment budget, you might want to consider subscribing to huluplus, netflix, or amazon prime as part of it. They are a very cheap way to have movie nights in.

WedinVolterra · December 2013

I could have written your post not long ago! I did spreadsheet tracking for a long time, but it never seemed to help us change behavior. It was just an after-the-fact assessment that made me feel badly about the choices we made

The one single thing that has helped us the most was finding a budget program that made sense. I highly recommend you check out the program You Need A Budget. They have a 34 day free trial so you can see if it will work for you. It's basically an envelope budgeting system -- you take your income and give every dollar a job and then instead of making spending decisions based on your bank balance, you learn to make them based on your categories. It's really helped us see the tradeoffs we have to make with our money. If we are out of money in the Restaurant category, but we really want to go out to eat, we have to first figure out which category we will take the money from -- usually something like Vacation savings -- and half the time, it turns out I'd rather cook than raid vacation savings! It's been a really invaluable tool in helping us figure out where our money goes and how we'd like to allocate it differently.

Erikan73 · December 2013

Thanks everyone for the encouragement and suggestions. I am taking a tip from the Dave Ramsy and trying out his envelope system. I think it will help us when it comes to everyday things like food, gas, trips to home improvement store, entertainment, etc. We've already gone from using cc for everything to debit card. I think we need to go one more step on certain expenses & do cash & when cash for that specific thing is gone, it's gone. I'll post updates as 2014 on how we are doing with sticking to our budget.

Creating a budget - rough

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