Budgeting 101

Budgeting is difficult. Everyone knows how it goes - you add this expense and then that expense and things start to spin a little out of control. Before you know it, all sorts of automatic withdrawals are happening to your bank account each month. My husband and I are going to start to build a new home for our family. It is time that we cut back and start saving more than we have been in order to prepare for this big expense. The following are my Top 8 Tips for creating a budget and what to cut out:

1) Get that old excel spreadsheet fired up on your computer! Enter in the income that you bring in each month. If the amount varies, take last years wages and divide it by 12. Be conservative. Try not to factor in any bonuses that are not guaranteed.  Record your net income that hits your account, which is what you have left after taxes and other contributions that you may be making.

2) Once you have your total income that comes in each month, start a separate column and list out every bill you have.

-Insurance (Home owners/renters, health, car, pet)

-Mortgage/rent, utilities (gas, electric, water)

-Childcare expenses (daycare, sports, etc) or tuition expenses (for yourself or children)

-Cable, internet, phone

-Groceries, dining, entertainment

-Car payments and fuel

-Memberships to gyms, clubs, organizations, subscription services, etc

-An average dollar amount spend on "unexpected expenses"

-Miscellaneous expenses

3) Once you have all of your expenses outlined, subtract your total expenses from the income that comes in each month (cross your fingers and hope that the number is not in the negative!) From there, start making cuts. What can go? Do you really need that gym membership that you haven't used in three months? How about that cable bill? Have you called recently to try an get your rate down? You would be surprise how much money a phone call could save your family.

4) The first to go for us was cable. Yes, you heard correctly - GONE. In its entirety. My husband and I decided we can go without it for a while. We have Amazon Prime and a dear friend shares her Netflix with us - what more do you need? The elimination of cable can save a ton. I cannot wait to have an old-school antennae set up like in the good old days so that we can get local television.

5) The next thing to do was switch internet providers. Internet is a must so that we can stream a little TV. Switching providers saves us $40 per month. All of these small steps will add up.

6) I have not been to my gym in a long time. Or to Weight Watchers. Those were the next two memberships to go. That right there provides a $30 per month savings. Gym memberships can cost people a fortune. If you use them, they are great. But if not, cancel cancel cancel!

7) Do any of you have a Bulk Goods Store membership? I love mine, I really do. However, I drop a lot of money when there. It's so easy to. I am committed to shopping at my local grocer and giving up some of my Bulk faves. It is so easy to walk in there, and leave with unplanned purchases. Everything seems like such a good deal! Plus, these bulk food stores are the only places where I can spend a lot of money on food, walk out with a cart full of groceries, but not actually have enough ingredients to assemble one complete meal. How does that work??

8) Lastly, bundling insurance. Bundle when you can - the companies want all your business and they will offer you a better rate if you give everything to a sole provider. However, if it has been a while since you have made that phone call, give your provider a call and negotiate a better rate.

Have you ever looked deep into your finances to see what could go? Everyone should be committed to doing this every year. It helps to physically write it all out and have it in front of you. It is liberating to cut things out if they truly are not necessary. Spend more money on EXPERIENCES! Those last a life time. Cable television on the other hand - that just sucks time away from doing things you enjoy! Now, go forth and save!