After writing a bit yesterday about our financial goals for this year I worked on our budget for January 2013 and decided I would share a little bit about how we do things in a four part series. I know that every family has different circumstances and different things work for different people but this is what has worked for us in our 4 years of living together. We started out living paycheck to paycheck and not being able to pay bills before their due date. This was a really hard time for us that felt like it lasted for ever!
Then, we found out that we were expecting K and decided it was time for some major changes and looked for full time jobs with benefits and made our first big purchase, our home. Then just before she was born we bought a car adding more and more debt. Four short months after K was born we found out that we were expecting R and we would have two babies a year apart. That meant two in diapers. We decided that I would take on a part time job since my husband had benefits.
After R was born in 2011 we found that she had a lot of allergies and required a very expensive formula and that she would have to be on it for the first 15 months of her life, so we started using credit cards because we could not afford the formula and pay our other debts and meet the needs of our family.
She finally got off of the formula in June of 2012, but the damage had already been done. We had a total credit card debt of over $10,000. We finally decided that we could not live that way anymore and created our first budget. I must admit we were not really good at sticking to it in the beginning but did follow our promise to not use ANY of our credit cards, anymore!
Today I am going to tell you how I started to organize our debt. The first thing that I already had going for us was that I keep all of our bills filed in file folders for three years (I will post more about this in PART 3). If you are not already keeping your bills then you should collect all of the bills you are paying for that month and begin your budget the following month.
Once I collected all of the bills I wrote them down in a notebook by their due date. I also included the bills that are directly taken out of our bank account. When writing them in the note book I wrote the name of the bill in one column, the monthly payment in a second column and then the total debt left, if it was a credit card or loan, in the third column. I then transferred each bill to a monthly calendar by their due date and labeled each pay day for the month in so I knew which bills should be paid in which pay day.
Now I use one of the weekly planners that you can buy, but you could easily make your own. It has a two-page layout with a calendar for the whole month followed by a two page layout for each week of the month. On the page with the whole month I write in when each bill is due and circle the pay days. Then, every Friday I log on to my online bank account and record the transactions that have been made throughout the whole week and note any income for the week. For things that were purchased in cash or cross categories we keep the receipts and put them into our bill bin to be sorted out and added to the planner. At then end of the month each category is totalled up and added to our budget.
Tomorrow, in PART 2, I will be showing you how I made our first budget.
No comments:
Post a Comment