Monday, March 8, 2010

Money Monday - Back to Basics Part 5 - Start Your Budget







It's time to start telling your money where to go! When making your list of expenditures for the month, keep in mind that anything extra is going to what we call:

BABY STEP ONE - Mini Emergency Fund (check out daveramsey.com for ALL baby steps)

Since you're going to stop using credit (right??) you need a safety net for emergencies. So once you're caught up (meaning you're not late or behind) on your bills, you can start throwing extra pennies each month into a savings account. 

"But I don't HAVE extra money!" Find it, do it, make it happen. I don't really care about excuses or why you CAN'T do something. If you want financial freedom, get off your butt and make it happen. We were there. Matt was commuting 3 hours per day by BUS into the city before coming home and going straight to a second job until 10 or 11 at night. I don't want to hear it! Find a way to make a few extra bucks to get $1000 in the bank!

Ok, sorry for the rant.

First four things you put on your budget this month:

Food: Figure no more than $100 per person in the house (try to go less). We did HALF of that while getting out of debt.

Utilities: lights, water, gas

Transportation

Mortgage

Then list your bills and subtract them against your monthly take home. Whatever is left goes toward your emergency in a basic savings account.

You'll need to update your budget each month with your spouse. 

Do it together and make sure you're on the same page.

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