budgeting 101

Budgeting is one of those things nobody wants to do, but it actually ends up making life much easier.  Here are the things we do to budget.

1.  Excel Spreadsheet – we have a line for all of our expenses (mortgage, insurance, groceries, gas, savings, utility bills, fun money).  We divide out our entire take home pay into one of these categories (every dollar is accounted for).  Then each month we fill in the actual cost of each item.  The idea is to keep everything consistent and to know if we’re over spending.

2.  Balance your check book

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All money coming in and all money going out we record in one of these registers.  That way we know exactly how much we have and can check later to make sure everything goes through our account correctly.

3.  File Receipts for the month

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We use this LBF (little blue file) to keep all of our receipts for the month.  That way at the end of the month we can fill in our excel spreadsheet to see how we did.  We have tabs for groceries, gas, and other.  After we add them up for the excel spreadsheet we trash them and use it again for the next month.

It’s hard to stay accountable with finances, but we’ve found that these 3 things help us a lot.  It also diminishes a lot of stress from not knowing where all your money goes.  Definitely worth the time.

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2 thoughts on “budgeting 101

  1. These are excellent tips. Knowing where the money is going is an indispensable tool for successful budgeting. It can be so easy to spend an extra few dollars here or there and by the end of the month, you’re a hundred dollars over budget without knowing how or where the money went.
    Since you mentioned Excel as your budget of choice, you might like some of the free spreadsheets I offer on my site: http://lessonsinpersonalfinance.com/. There are spreadsheets for budgeting, investing, paying off debt, etc.
    I hope you find them helpful!

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