Welcome to Day #2 of the 20 Day Budget Challenge!
Yesterday I discussed how important it is to have a budget in place – and how it brings me FREEDOM! I really feel like that is a crucial mind-set to grab hold of when wanting to get your finances in order.
Now some of you may agree that having a budget sounds like a great idea, but you aren’t exactly sure where to begin. For those of you to whom that applies, I’m going to ask you to read How To Easily Create a Basic Budget. Having a budget is key to having our money work for us, and us not being ruled by our money.
Check out the tips that Jen from Inspiring Savings gives on setting up your budget. If you have specific questions, I know she’d be happy to answer them at any time. She’s my real life friend and she’s pretty awesome. 🙂
For our family budget, we use an excel spread sheet and have categories for all of our expenses. Most people will go month to month keeping track of income vs. expenses. One thing to keep in mind though, is that categories like car maintenance or clothing won’t be the same month to month. We have categories like that set up on a yearly basis. For car maintenance, we have $1500 allocated for the entire year. Hopefully we don’t lose an engine in January! If we did, we would have to re-evaluate and maybe tap into some of our emergency savings. If you don’t want to separate expense categories monthly vs. yearly, then just be sure you are putting away some money each month that an cover known expenses that will come up like car maintenance.
I also keep all of my receipts and stick them in my checkbook after each purchase. When my checkbook gets unruly with paper falling out of it, then I know its time to sit down and plug in those numbers into the budget. I spend about 45 minutes – 1 hour about once every 3 weeks or so doing this. When shopping online, I use my credit card. When my credit card bill comes each month, I go line item by line item and add each expense to the budget. It may seem like a total pain if you’ve never done this data entry before, but again, the peace you will feel knowing where your money is going is SO worth it!
My system is just one way you can keep track of your expenses – but it may not be the best for everyone! I know the cash/envelope system works well for many families!
What do you do to keep track of your purchases & bills? Come and tell us in our Budget Challenge Facebook Group!
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