Budget Overhaul: Are You With Me?

Last year was not the best in terms of paying down extra on our debt. We had some expenses that we didn’t plan on. So now that it’s a new year we are going to focus on our budget. I’m naming this the year we do a budget overhaul!

Some of those expenses were our choosing, talking to you our awesome vacuum/air purifier. The other expenses, were not totally our choice: a broken fridge, finding out we had termites, a unplanned medical expense, and putting in a long overdo AC (it was that or fixing a broken swamp cooler in the middle of the summer, 90 degrees inside is not my idea of a fun time.).

I am glad we had money set aside to take care of those things. I know there will be unexpected expenses all throughout life, but I sure hope not this year. 🙂 One can hope, right?!

This year we are going to help ourselves and do a budget overhaul to make sure we have money to take care of those lame things that come up. But our main plan is to pay off some things!

There are a few things that we need to pay off. One is our mortgage, second Eddy’s school loans: both of those things are going to take some time. But we’ll chip away at them slowly at first and then hopefully faster and faster.

This year our big plan is to take care of few smaller debts.

• Cell phones- sick of paying monthly with our bill
• Security system equipment- they are almost gone so this is the year to get it done
• Van loan- this is going to be the big one for us this year
• Save up to go to Disney World with family in the end of the year- we want to have the money all saved before we go and NOT stress about it

If we are true to our budget, most months, then we will be able to have these taken care of. Music to my ears! The idea will then be to take our monthly van payment and put that to more savings and paying off school loans and eventually our mortgage.

Okay, now that you know the why behind our budget overhaul let’s get in to how we are going to do it all. If this is the first time you are doing a budget read all the way down to know where to start.

First: Set Up a Budget of Just Your Needs

These are things like rent or your mortgage, utility bills, grocery food, car insurance and gas or transportation, health insurance, and anything else you have to have in order to live.

What I am NOT talking about: cell phones, internet, cable, going out, shopping. etc.

I started an Excel spreadsheet and listed all of our fixed needs or bills that we need to have in order to live in one column. There is a column for the date it needs to be paid, one for how much the bill is, and a column for where the money is being taken out of.

There is also a place for groceries. We have a set budget each month for how much we can spend on food. This includes any case lot sales, Sam’s club trips, and any bulk meat orders.

Second: Set Up a Budget For All Other Things

This is where you can add cell phones, internet, going out, clothes, blow money, etc.

Some of these monthly items I consider bills and have included them in our fix column. Other items have their own column because they may have multiple receipts.

Third: Figure Out Your Income

This may sound silly but you should know what your income is monthly if you are on a fixed income. If you are not, then I would take at least 6 months to a year of income and average it out to what you would “make” monthly.

This time around, because we have started and stopped budgeting a few times, I got smart and made an area on my spreadsheet to show the times Eddy gets paid and what he got paid. One of the most important things is what is taken out of each paycheck.

We have our health insurance, retirement, HSA money, dental, etc. taken out of each paycheck. And not to mention taxes. It is nice to know the exact amounts taken out. At least it is for me. Now that I have it on my spreadsheet I no longer need to keep asking Eddy. Haha!

Fourth: Start Tracking

Once you have spent some time with your spouse, partner, or your yourself going through your budget now you get to start tracking your expenses. There are many ways to do this. We have tired a few.

This time around we may try a combination of receipts and looking at our accounts. This is the part that always get me frustrated. I no longer cry each time we do our end of the month check.

Those were some maddening times when money didn’t add up and we always seemed to be short or under. I have had to learn to just let some things go. I have also learned to loosen my grip on money and relax.

Both of those things are hard for me to do, I have a lot of anxiety round money. Breath, Steph, breath! 🙂

I am not going to go into detail about ways of tracking your expenses. A quick Google search will give you tons. You can write your expenses down daily, weekly, monthly. It’s up to you if you want to use a spreadsheet, a paper and pen graphic, use an app or online tool. There are countless methods.

Research ways that might work for you. You may need to try some out. It may take a few months. That’s okay. The point and important part is that you are tracking your expenses.

All of your expenses!

Not just the main ones. The ice cream cone, cup of coffee, or trip to get a pair of socks. All of your expenses need to be on whatever method you choose for tracking.

Fifth: What’s Next in the Budget Overhaul?

Most everyone and everything that I have read suggest tracking for at least 3 months. Especially if this is the first time you are budgeting. You need to get a base line of what you actually spend each month in different categories.

After the 3 months of tracking your expenses then you will have an idea of what you spend on food, going out, shopping, etc. Really think if the amounts you spend are a good fit for your family, income, savings, debt, etc.

I’ll do a more detailed post on this soon.

Keep checking in with your budget to make sure each category has the correct amount of money allotted to it. If you are constantly over spending you may need to figure out why or up your budget a bit.

Good luck getting your budget overhaul started! Each month this year I’ll give some tips, tricks, hacks, and ideas to help you get your budget under control. Hopefully we can work together to accomplish some budget/money goals.

Last year I focused on getting our whole house organized! Do you want in on organizing your house? I have a monthly challenge going on this year. get signed up here. This year I have a few goals, getting back on track with budgeting is a huge one. Up for next month: cash vs. credit cards. 🙂

Xxx, Steph