Friday, April 20, 2012
Do You Have a Budget?
I've earned a living doing bookkeeping and accounting work for the past 20 or so years. Is that why I like budgeting? I'm not sure. But in any case, I've had a household budget for the past 6 years or so. Sometimes I stick to it and sometimes I don't.
I don't really believe in "unplanned" expenses. I know that sometimes things come up that we didn't really think about. But...at the end of the day, if you own a car, you can be pretty sure that it's going to need repairs at some point. You can be pretty sure that the insurance will come due. It's the same thing with having a house. There will come a point when the hot water heater will stop working or the roof will spring a leak.
Why not just put a little money aside for these things each month? I have a checking account and a savings account that I use for day to day expenses. I save for these unplanned costs in my savings account. I keep track of how my savings account balance is allocated in an Excel spreadsheet. You could easily do this on a piece of ledger paper, or even lined paper. It doesn't matter really. What matters is socking some cash away each month for these types of things has KEPT ME OUT OF DEBT!!
Some of the things I save for every month are:
* Home Insurance
* Car Insurance
* Medical Expenses - I have Anthem Blue Cross with a $5K deductible, so this is a big one!
* Dental Expenses - I have NO dental insurance. My teeth look good, but they cost A LOT!
* Toner - If you have a color laser jet printer then you know what I mean. It's around $400.00 every time I have to replace those toner cartridges because they all go at the same time.
* New Car - I LIKE paying CASH for a new car! I put money aside every month for the next one.
* Computer - I'll need a new one at some point
* Christmas - It's nice not to feel completely defeated and broke in January :)
* Car Repairs
* AAA - That bill comes in and it's around $150 for three me, my husband and my daughter.
These are a few. You get the idea. What I do is decide on how much I want to have saved for each expense, then work towards that. For example, my home insurance is around $1,500.00 per year and I know it's due in August. So each month I'm putting away $125.00 for this bill. If you are starting in January and the bill is due in August, then you need to put away more between January and August to "catch up". Make sense?
In May I'm planning to try paying cash for groceries. That's one area that I'm not good at. It's just so easy to overspend when I use my ATM card at the checkout. Groceries are one area that most of us aren't good with. I'm going to pretend it's a game and see how well I'm able to stick to my $350.00/month budget. Maybe I can get it lower. I'll keep you posted. Also, know that it's just me and my husband at home so $350.00 can work for us if I plan well and watch what's on sale. I know that for a family of four, that amount might seem crazy, but it works for us (for the most part).