Budget Progress!

November 2, 2010

We all know that Casa Windows has been run by a very lose “budget” up until this point.  Our budget was spend, spend, spend..then figure it out.  Naturally, this wasn’t allowing us to save our money nearly as efficiently as we could have been.

When I decided to develop this budget I made a few key decisions that would make it easier for me to wrap my head around it.

First of all, this isn’t a business and we don’t work on a month-to-month or annual accounting schedule.  We get paid every two weeks.  So, I decided that I would set up our budget to go for two paychecks–or 28 days.  This is pretty close to a month.  It’s also how we pay our bills–each paycheck has certain bills that get allotted to it even before we had a budget.

So, our first round of budgeting started on October 14th and will end on November 10.

This has been CRUCIAL to me being able to understand this budgeting habit I’m trying to establish.  Without having the budget work this way, I’d have to divvy up our dinero by day and then month and frankly, that’s just moving outside of what works for us.

In the event that you’d like to start budgeting–this is my biggest tip for you–find a date range that works for you!  If you get paid monthly and establish your spending that way, do it that way.  If you get paid bi-weekly on a certain day of the week, set your budget up like we did.  It all depends on how you break up your spending!  This is the primary reason I never budgeted.  I just couldn’t make sense out of the fact that I got paid bi-weekly, but paid all of my bills monthly.  The fact of the matter is that I still paid all of those bills on a monthly basis, but certain bills were paid with certain paychecks.

So, on my budget, I have listed all of our reoccurring bills:

  • Mortgages 1, 2, and 3
  • Cars 1 and 2
  • Student Loan
  • Insurance (we pay our car insurance every 6 months, but I move the monthly amount into savings so I know we’ll have it when it’s time to pay it)
  • Cell Phones
  • Entertainment–Netflix and Internet
  • Water and Sewer (our tenant at Gilbert pays this, so we only pay 1 bill)
  • Electric 1 and 2
  • Gas 1 and 2
  • Trash and recycling (we pay this quarterly, so I move this to savings as well until we make the payment)
  • Life Insurance
  • Savings–emergency/regular and vacation
  • Misc Spending (fun money–this includes hair cuts, clothes, video games, baby shower throwing, etc.)

ALL of our reoccurring spending equates to about 87% of our income.  Granted, our “fun money” may change depending on what we are doing–we may save it one month to buy a more expensive item, etc.  But for the most part, this is all pretty solid.

The other 13% of the budget is allotted to groceries, going out to movies (we do this at least once a month), gas for the vehicles, eating out, and gifts for other people.

My biggest success with this is the amount of money we’re able to save every month now.  It’s still not as much as I’d like it to be, but it’s A LOT more than what we were doing before.  With the amounts I have in there now, it’s about 14% of our budget that we’re putting into savings.  I’d like for it to be more like 25%, but that will come with time.

So far our budget has served us well enough that I’ve already established a new spreadsheet for the next 2 paychecks (also, the next 28 days which I’ve decided is close enough to a month).

Do you have a budget?!  If you do, what’s your key to success??

If you have any specific questions for me, feel free to comment on this post or email me at kari_s {at} hotmail {dot} com!

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