Creating the Perfect Budget
1. First what we must know is what we’re bringing in on those pay periods. For salary employees it’s easier to calculate, hourly employees this could vary and may have to plan in half month increments.
2. Once we have how much we’re bringing in then, we calculate the payments due before and after that first pay period. This would typically be rent, utilities, and possibly a cell phone bill.
3. Along with these constants add in all the minimum payments you may have during this time of the month.
4. Now that you have the total price of what is due, take that total and subtract it from your paycheck for this period. What you have left over can be divvied up in multiple ways.
5. You gotta eat right? So, this remainder is for food, gas, savings for a goal, putting more towards a debt or paying off a debt, and tithes or charity (whatever floats your boat here).
6. The remainder you’re left with should last until the next pay period. This where self-discipline is put to the test, and the words need and want are constantly in a battle with each other. You may splurge more in some areas than others, that’s fine. If, your numbers balance out and you have the necessities you can put more or less of your money into one or more of the leftover categories.
7. We’re getting close to pay period number two. Here’s where I double check I have my second round of automatic payments setup. With a busy a schedule there’s no shame in double checking. I’m OCD about these types of things so I’m checking regardless. Maybe we have some rollover to add to our next paycheck since we were so frugal with our spending in the weeks before! Even if we’re bad just a tad we can make up for it with round two.
8. We repeat the steps 1 – 5 again, but now we look ahead to the next month. We all know what’s waiting for us on the first day of EVERY month, and we don’t even get a New Year’s Day special either. So, when you are calculating the payments here, add rent to your money going out total so that you’re covered going into the next month, and the first of the month is another walk in the park when it comes to your budget. Some of you may have a mortgage payment and are paying twice a month to knock off some of that lovely interest you incur buying a home. That fits in as well. Just add the second mortgage payment in with the rest of your bills and follow the steps as you normally would.
If you are interested in receiving a spreadsheet that allows you to easily record and keep track of your budget, submit your email below to have it delivered to your inbox.
