I have spent the past few days putting together a budget. I had NO clue where to start so after a little bit of research, inspiration on other PF blogs and websites and overall experience with making plenty of half-assed budgets in my life that I don’t stick … I was able to fumble my way through a new budget. In the end I am very happy with what I came up with! Here is how I did it, step-by-step:
1. Figure out my monthly income (easy…the one thing I have a good track on!)
2. Download all transactions on my bank card since Jan 1st of this year into an Excel spreadsheet. I figured the last 3+ months have been a relatively good starting point to use. I use my debit card for basically everything, which makes figuring out where my money goes pretty easy. I rarely take cash out, so it was easy to itemize out where the cash went as well.
3. Sort the transactions by amount as I found that was much easier to itemize. It puts all of my small food/lunch purchases together, big purchases including rent payments on top, etc. I was pretty easily able to itemize everything into the following categories:
- Rent – duh
- Debt Pymt – all payments made towards debts (usually have flexible payments due amount)
- Fixed Bills – all payments made for utilities, gym, cell etc (all have fixed payment must be made each month)
- Entertainment – anything spent while out socially, drinks, admissions, nice restaurants, etc. Also I am including Hair & nails in this category, I know, random, but it works in my mind. I don’t get either done THAT often, so when I do its kind of an “entertainment” reason or expense.
- Food – groceries, lunch during the week, coffee, etc. More “everyday” food
- Shopping – VERY large category that currently includes Target trips for home good, Ikea, regular clothes shopping, etc. Amount budgeted is transferred into a separate “Shopping checking account” that I recently opened. The point is that if I have money in that account, I will never feel bad about spending it. I will also not allow myself to overspend into my savings or food budgets.
- Travel – the amount budgeted here goes into the Shopping checking account as well and is used while on travel or for plane tickets, etc.
- Wilbur – food, vet bills & pet insurance for the lil rugrat. Boarding costs fall into the travel budget as it is a cost of being able to travel, rather than “puppy upkeep”
- Savings – all leftover, plus Bank of America’s Keep the Change program
4. From there I split everything into the categories (mind you still keeping the dates attached to each item). And then I figured out how much I really did spend each month in each category, but then I also added up all items and divided by 3.5 (since it had been 3 and 1/2 months of data) to find an average of sorts.
5. At that point I was able to easily figure out how much I was spending per month and how much I SHOULD be spending per month in each category. Here is what the spreadsheet currently looks like
Behind the scenes there is some formulas to make things super easy which is nice. I have created a tab for each month and modified the budget slightly as needed. I am only $35 over the budget that I just made for this month! So hopefully I will be able to easily be under budget next month. Especially since next month I have an extra paycheck AND the insurance payout from the vet fiasco. Also next month I will be doing all of my credit card consolidating and maneuvering since the collections company said that the ding doesn’t get credited and sent over to the credit monitors until the end of the month.
Ugh I hate the waiting game! That might be the most frustrating part in debt repayment! Once you have a good solid plan in place, you just want to press fast forward and watch the plan play out without the waiting! Patience is a virtue!
