Pay Day = Budget Day
Yes, a budget! What is that? Do you have one? We do. We got it from a powerful/life-changing book and APPLIED IT! The book is: Total Money Makeover by Dave Ramsey. (You can get a copy for $10 @ www.daveramsey.com). (Young people get this book, you need it now, not later. Retirement is a real thing to plan 40 years in advance for!!!)
Here's the routine for our pay day here in our home: I get my husband's payroll check, STRAIGHT to the bank, deposit it, WITHOUT cashback at this point. Next, I go home, and double check my budget sheet that I created a couple days prior to pay day (just in case something has come up).
Here's what I do to prep for my budget:
Step 1: Gather up all bills from my special "Current Bills Due" folder at my desk.
Step 2: Fill in the dollar amounts in these catagories:
First are the things we pay by check:
- DHM (money insurance, first right?...for some who don't know what this is: tithe)
- Additional Giving
- Life Insurance
- Mortgage pmt.
- PG&E
- Gas Co.
- Water Co.
- Brighthouse for Internet only...who needs cable when you've got Netflix.
- Gardener
- My Cell - errr. I hate 'needing one'.
- Car (would love to pay this off a.s.a.p.)
- Car Insurance
- Gym fees
These are the catagories that I get cash out for. The thought Dave Ramsey has is, take the cash out, don't use your debit card because, when you walk into Target w/ only $40 for the baby's diapers & formula, there's no cash leftover to buy that cute tank top 'on sale'. If it's not budgeted for, then don't buy it. Now if you NEED clothes, make a catagory & give yourself a budgeted amount & STICK TO IT! Here are the catagories that we pay cash & avoid debit card use on:
- Gas (a certain amt. for me/a certain amt. for husband)
- Groceries
- Toiletries
- Jacob's needs
- Daniel's meds/needs
- "Allowance for husband"
And that's it. There are times like this week, we have to add: Car Maintenance, and Clothing for Daniel. And month to month, there may be an additional Kaiser/medical/dental catagory for those extra things that come up.
The beauty of a budget is that you can start a catagory for an expense you know is coming in a month or two. Like oil changes, car maintenance, birthdays, tags for the car, tires, etc.
I add up all the expenses, minus it from the income to confirm that I have enough. I always know what we have left over after all our needs are filled in.
What to do w/ this money? Throw it at the debt, save for something you're going to need like: car, appliances, furniture. Why finance those things, when you can save & pay cash, get a better deal because people make deals for cash...and save yourself a ton on interest right? (GET THE BOOK & READ IT!)
So the budget sheet is filled in & the check is in the bank.
Step 3: Balance checkbook before I even begin paying out.
Step 4: Pay bills online (saves $$$ on checks and stamps)
Step 5: Make 'cash item list'.
Step 6: Go to bank for cash.
Step 7: Go shopping with my lists for Target/Walmart, WinCo, Costco, etc!
Step 8: STICK TO THE LISTS! :) (still struggle w/ it...but always working on it!)
This is how we live. Pretty simple & basic math. You don't need a BS in Accounting to live on a budget.
Now the key is to NOT spend all my grocery money at the store the first day we get paid so that in a week when we need fresh produce, I have CASH for that. There will be times that there's a little miscalculation in what I need, but I try so hard to NOT use my debit card.
The philosophy behind using the card is 'it's unlimited'. Oh, I have the extra $50 in the bank so I can buy this - thing I absolutely don't need & will only use/wear once.
If you do this budget, you will find that you DO have the money you need for the month typically. You tell your kids/employees what to do, why not tell your money where to go & what to do so that you control your spending!
I might point out that I am strategic w/ my bill paying too. Say we get paid the 1st, so the bills due from the 9th thru the 23rd, I pay the first week of the month. The bills due from the 23rd to the 8th of the next month, I pay at our mid-month pay day. This way my bills are ON TIME. The wonder of this is, I only sit down & balance my checkbook 2X/mo., always aware of what I have - this avoids ISF fees, right? And I only pay my bills 2X a month, never wondering when a bill is coming in or if I'll have enough. This provides me peace of mind, and more time w/ my kids. I avoid: paying as I go, trying to always find time every couple days to sit alone & scream at the kids as I try to crunch number to make sure some money is there for this one bill, right? Who wants to do that 2-3 times per week? This budget system keeps my time managed better too. I know what days are pay days, so I build time into my schedule to do all this in advanced.
This is how we live and we live pretty stress-free over finances. We know we make enough to live on. Now, if we are broke & in a bind, who's responsible
