Turbo Tax

Tuesday, July 27, 2010

Strengthen Your Budget - How to Make a Budget

Tuesday's Tips Button

As I told you last week we are focusing on Budgeting for several weeks.  Before I get into how to cut back in certain areas, I thought we'd better discuss the How!

Make a Budget

When most people talk of making budget, they are actually tracking where all their money went and calling it a budget.  That's not a Budget, that's a Report!  A Report is what tells where your money went, a Budget tells your money where to go.  Don't forget, you and your spouse are the ones who tell the money where to go.  As Dave Ramsey says: You are the boss of your budget until you write it down, then the budget becomes the boss of you!

New Month, New Budget

While parts of your budget will be the same month after month, such as your house payment, insurances,  etc., you will want a new budget each and every month because things are different each and every month.  One month you may have more birthdays or weddings than normal to attend, the next month your child may have a field trip.  Realize no month is perfect and neither is any budget, you will need to adjust it each month.  Sometimes you need to adjust it each pay period!  Just make sure you are still having a zero based budget.

Strangely enough, while it sounds restrictive, most people find it freeing in the long run.  It's freeing to know that when property taxes are due, the money is there, no worries!  It's freeing to know that insurance money has been saved up and all you have to do is move it from your savings account to checking!  In the short term it's hard to say no to that latest, greatest gadget, but when you know the big things are taken care of, it helps tremendously!

The Actual Budget

I was given PearBudget to try and enjoyed it at first, however, I realized with our irregular income it became too hard to  make a zero based budget every month.  I was spending MORE time filling out my budget each month.  Using a program was supposed to make it less!  I think this program would work great if you have a paycheck that's the same each pay period.  So through this trial and error I'm back to my printed budget sheet and a pencil & paper, along with a calculator.

Entering Data

I am a true nerd at heart, so I also like to have reports too!  I have a really old version of Microsoft Money for this.  I love that I can have all our account balances in one place and that it shows our net worth.  Once you are out of debt and don't have those numbers to show your progress this let's you see where you are going.  It's awesome to be able to pull up reports to let you know how much you spend on irregular budget items, so you are able to budget a bit better in the future!

Let's Hear From You

Do you make a new budget each month, Before the month begins?  

If you're a blogger I'd love you to link a tip for the home, family, or money management.  Please link directly to your post so others can easily find your tip and put a link back here on your blog.

 Making a Budget BEFORE the month begins Works for Me This post is linked to  Thrifty Thursdays, and Frugal Fridays.

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Stacy said...

This is the month for us to get license plates. I've already asked dh how much it costs, so that I can add that to how much I save back out of each pay so that next year, it won't be such a OUCH to pay for them.

DD wants to go to church camp next summer, so I am also adding that to our budget, putting away a little each pay period, so that the $ is there when we need it.

With dh being self-employed, it was very hard to make a budget because we never knew what the income would be. Now that his work has been drastically cut, it is so important for us to be wise stewards of what we have.

Angie@Purposeful Kitchen said...

I'm not as good with a budget as I should be. I need to be more motivated in that area!

Thanks for stopping by and telling me about your Tuesdays Tips!

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