Plan A: Budget
Everyone needs a “Budget Plan” but few of us bother to compile one. Yes, I’m guilty. I ran around spending with little rhyme or reasoning until I found myself sinking deeper into the dark hole of debt.
Okay, I can do this. After all, what is a budget plan? To me a budget is your monthly income verses your monthly bills plus extra spending. If the budget doesn’t balance out in the plus zone then you’re in trouble.
Step 1: Keep you receipts! You can’t always depend on the Bank or Credit Card Company being up to date on your balance. Especially keep your Cash receipts! Using a cash receipt will keep you on track of where and how the cash was spent.
Step 2: Note your monthly Income.
Step 3: Make a list of your “have to have”. This list should include food, clothing, utilities, rent or mortgage, insurance (including health), debt payments and so on.
Step 4: Make a list of your “want to have”. This list should include any extra spending you can live without or cut back on such as eating out, entertainment, buying more shoes than you will ever wear and so on.
Step 5: Add up step 3 and step 4 then subtract the total from your monthly income. Are you still within your budget limit? If not, then you are running in the negative zone!
Step 6: Take an in-depth look at your “have to have” and “want to have” list. Find ways to cut spending in all areas. It can be done. I know because we’ve done it even in the food category. Ask yourself, do you really have to have that fillet of minion or will a good cut of beef fill you up just as well?
One of the largest holes in our budget was Cash spending and not keeping a record of this type of spending. After learning this lesson the hard way, we now rarely use Cash and when we do we get a receipt and make note of it in our Budget Planner.
A Budget Planner is my preferred way of keeping my budget balanced. In psychology ideology I am a hand to eye to brain person. Meaning if I write it down I’m most likely to remember it. I started out with a $1 spiral notebook. I have since moved up to an amazing Budget Planner that covers two years which allows me to look back and compare my spending habits.