Life has been BUSY the last few months..year…some days I wonder when #adulting pauses…pretty sure never. This past year I’ve really learned a lot about myself and actually being an adult HA. The biggest thing I learned about myself was finances. Budgeting sounds scary and I also think it has a negative connotation when it shouldn’t necessarily. More thoughts on basic budgeting here…
Budgeting has allowed us to pay down debt, get a grip on our expenses and pursue home ownership. More on that later.
As a follow up to my first post on how Dave Ramsey has helped us get on track with our finances, I wanted to show you all some tips of what I do at the beginning of every month!
First and foremost, get familiar with your spending. I have a spreadsheet where I create a new tab each month for all expenses divided into the following categories: bills, cash, debt and sinking funds. All our bills are automatically deducted from our account each month so I am never late and have a lot of less thinking and paperwork to write out. Typically these are not costs you can not adjust very much.
Next, write down ALL the things you spend money on each month. It might help by looking at your last few bank statement charges but this should be categories like groceries, gas, haircuts, dry cleaning, take out, etc. These will be costs you adjust and budget for.
You DO NOT need to feel guilty about any of these above items. I know I love to get my nails done and typically run out of mascara or face wash (or something!!) each month and so I fit that in here for cash spending.
And then comes the stuff we wish we didn’t have…debt. Write em down!
This last category is my favorite – sinking funds! These are like mini savings accounts – how fun! The first few months we started a budget, I didn’t use these but was consistent on putting in small amounts each month. When it came time for a surprise Vet visit for Daisy, needing a birthday gift and buy some moving boxes, I didn’t even need to pull out my debit card! It was a GREAT feeling. It felt like free money…(no such thing really) but you get the point.
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Sinking Funds will look different for everyone. For example, last year we didn’t have any weddings and this year we have three so I thought it was important to put money aside each month for shower gifts, bachelor/bachelorette parties and day of wedding gifts. And last year I had a moving fund which I won’t have this year :).
What’s left after all this is what you can save!
I list my debts second because of their level of priority, but I decide on how much I’m going to designate to them last depending on what I have left for the month because I try to put as much to them as possible each month while still putting some money to savings. Debts could be credit cards, school loans, car loans, or paying your friend back for buying you those cute shoes for you when you forgot your wallet in the car.
Over the last year, I’ve learned how important budgeting can be. It’s not scary if you plan for everything you want and need to spend money on. You can find Dave Ramsey’s program and book info here. You can also find his show on iTunes and in your Podcast App.
I found this small accordion folder on Amazon for less than $10. This is what I keep our cash in every month. I use envelopes for sinking funds and keep them in the back as they aren’t something I grab for as frequently.
If this post bored you… please let me know and I’ll focus more on the fun stuff like clothes, hair and workout motivation! If you love life hacks and how to adult better, tell me what you want to hear!