Welcome back! I hope your you are starting to feel like you are making a little traction on creating a budget! Yesterday, you went through and calculated how much money your budget will need for your “4 walls.” These expenses in your budget are food, transportation, clothing, and housing. You also should have printed out Dave’s Monthly Cash Flow Plan and began filling in these numbers on the cash flow.
Today we’re going to continue working through the Monthly Cash Flow Plan. The goal of this form is to have your income – expenses = $0. Every penny should be accounted for. You need to tell your money where to go and then spend accordingly. You may not currently be putting any money aside for car replacement, but as we talked about yesterday, if you have a car, eventually it will need replaced. If you don’t plan in advance, you will have to borrow the money from somewhere, causing you to go into more debt.
As you continue through the subcategories, add them up all up and place the amount under “total.” As you continue through the month you will place your actual expenses under “actually spent.” Some of you may be very close to what you budgeted and what you actually spent. If there is a significant difference, something will have to change. Either the amount you budgeted will need adjusted to what you spent or you will have change the way you spend.
On the form where there is a picture of an envelope beside it that is where Dave recommends using his “envelope system.” I have used this in the past and it does really work on keeping you within your budget and I recommend it! Remember, you don’t have to go buy his fancy envelope system. You can use regular envelopes to save money and Pinterest has some great ideas for you crafty women! (Some of them are so pretty I would be motivated to use them!)
It is also important that if you are going to follow Dave’s Plan that you put all of your savings into your emergency fund until you have 3-6 months worth of expenses have been saved.
Christmas, birthdays and other occasions where you need to buy gifts should be budgeted for. You will not be tempted to use the credit card if you have this planned in advance and can also buy items on sale because you will be adding to the account every month.
It’s time to pull out your financial papers again and get to work! Go through each item on the form and calculate what you pay for these each month.
On your utilities, some of you may do budget billing. If you do, fill in that amount. If you don’t, you will have to account for the time of year it is when you do these. We spend more on electric in the summer running our air conditioner and more on propane gas in the winter running our heat.
For those of you who pay your bills online, you may be able to get on your account and find the numbers faster than going through your financial statements.
Remember, the goal at the end of this form is to have your income – expenses = $0. Every penny should be accounted for. you plan on paper before you spend
I will have have budget posts throughout the weekend so those of you who work full-time can devote some time to finishing yours while you are home. I know it’s hard to go to work and come home and do financial stuff, I’ve been there!
Keep plugging through it, budgeting can set you free of the bondage debt has put you in! I’m very proud of all of you who are embarking on this journey of changing your spending lifestyle. It can be hard, but stay strong and persevere! It will be worth it!
In case you missed any of the earlier posts in this series:
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