You have to budget if you’re broke. There’s no other way of getting around it. If you don’t budget, you find out that you’re about to get the electric cut off and have a choice between electricity or food. So here are some steps to take to keep that from happening.
#1 Write down your monthly bills.
This part is simple. Write down all your monthly bills. Write down the days they are due and the amount you have to pay. If it varies, like the electric, you will need to estimate. Look at the last few bills and OVERESTIMATE how much you think it will cost. ROUND UP on everything to the nearest dollar or $5 or even $10, but always ROUND UP! This gives you cushion. Also, seasons can sometimes change how much you pay. For example, if you have gas heat and window AC like me, your electric is higher in the summer and lower in the winter, and your gas is higher in the winter and lower in the summer. Well, I’m sure you’ve figured this out by now. So here’s an example:
|1st of the month||Car insurance||$115.00|
|16th of the month||Gas Bill||$50.00|
|18th of the month||Water Bill||$40.00|
|20th of the month||Garbage Bill||$20.00|
|25th of the month||Electric Bill||$20.00|
|28th of the month||Netflix||$25.00|
|30th of the month||Cable Bill||$65.00|
#2 Write down your paydays for the next 6 months (after taxes).
ROUND DOWN. This will give you more cushion. For this example, I am only going to do 3 months to make it shorter and simpler.
#3 Put it together.
Here’s the hard part. Intertwine the bills to where they are paid on time and you have about the same amount of cash left over after bills each payday. You will notice that there will probably be a pattern. You’ll pay certain bills with one paycheck, and others in another paycheck.
|January 16||Gas Bill- January||$50||$550|
|January 18||Water Bill- January||$40||$510|
|January 20||Garbage Bill- January||$20||$490|
|January 25||Electric- January||$20||$470|
|January 25||Netflix- January||$25||$445|
|January 30||Cable Bill- January||$65||$535|
|February 1||Car Insurance- February||$115||$420|
|Free Payday!!! *||$600||$0|
|February 16||Gas Bill- February||$50||$550|
|February 18||Water Bill- February||$40||$510|
|February 20||Garbage Bill- February||$20||$490|
|February 25||Electric Bill- February||$20||$470|
|February 28||Netflix- February||$25||$445|
|February 28||Cable Bill- February||$65||$535|
|March 1||Car Insurance- March||$115||$420|
|March 16||Gas Bill- March||$50||$550|
|March 18||Water Bill- March||$40||$510|
|March 20||Garbage Bill- March||$20||$490|
|March 25||Electric Bill- March||$20||$470|
|March 28||Netflix- March||$25||$445|
|March 30||Cable Bill- March||$65||$535|
|April 1||Car Insurance- April||$115||$420|
#4 Remember the details.
Don’t forget that sometimes bills fluctuate during the months and fix the budget accordingly.
Did you notice the free payday?
If you get paid every other week, you should get paid twice a month. However, sometimes there are three paydays. If you get paid weekly, you’ll get paid four times a month, but now and then you’ll get a fifth payday. Those of you who get paid weekly will get more free paydays, but of course it’s half the amount as what you’d get paid if you were paid bi-weekly.
#5 Budget the extra cash
Now that you know your extra cash after bills, you need to know what you need to spend it on. Here are a few things that you probably want to put into the extra cash budget:
- Fuel for vehicles or fair for public transportation
- Fast Food/Groceries
- Baby stuff- diapers, formula, butt creams, medicines, clothes, whatever else
- Household cleaners
- Animal food
- Tobacco (nasty habit, but hey some people do it)
- Anything else you may need to spend your money on
#5 Keep to the budget:
Now that you have a budget, keep to it and remember your priorities. There are a few ways to keep to the budget.
Personally I make a shopping list and estimate the amount that I will spend on each one. Here’s an example of a shopping list:
|Toilet Bowl Cleaner||$5|
|Dish Washer Detergent||$10|
I usually make a different list for groceries with a total of my food budget (this example is $150).
Another way to make sure that you stick to your budget is to withdraw all the “extra cash” after bills from your banking account (if you don’t already have it in cash) and put them in marked envelopes. Write what each envelope is for and put that amount in the envelope. As a matter of fact, it’s a good idea to use cash. It’s a lot easier to go over your budget by swiping a card than by seeing the actual total you have left right there in your envelope. A dollar here and there adds up to a lot. If you go over $10 on household supplies, you might not have enough money to get soap and shampoo. You’ll stink, but hey your toilet will smell like lavender, right?
I will be making another blog post with tips on how to stick to your budget and save money. There are many things that you can do to save a dollar here and there to add up to extra cash to throw in the piggy bank for the things you really want to spend it on, like a vacation!