I promised I'd go into detail on our budget at the beginning of each month and so here I am. Most of the Total Money Makeover is about discipline, self-control, and sticking to your well laid plans. This involves sticking to a budget each month so that all the extra money is focused on your debts.
I'd like to state that we are in remarkably great shape compared to the average person on Ramsey's plan, at least in my opinion. Kristi and I have began the habit of listening to his radio show podcast on the way to work and it seems to us that most people are in a much worse situation than us. For example, we have $0 credit card debt, whereas many people seem to have ten, twenty, or fifty or more thousand dollars in credit card debt alone. A lot of people also seem to have giant car/truck payments, a home equity credit line, or even a second mortgage on their home. I feel lucky, honestly, that up to this point we've been relatively responsible with our money.
That's not to say I was responsible all the time. In college, and while I lived on my own, I wasn't always the best handler of my money. I spent money on all kinds of things, and usually there was always too much month and not enough money. Because I was irresponsible, I racked up some credit card debt, to the tune of about $2500 or so. Again, not a crazy amount, but still more than I ever plan on having again.
The budget, I've found, has really helped me stay focused, and instead of spending money frivolously and on impulse, it's made me examine my purchases more closely. The first thing that pops into my mind is board and video games. There are several games I know I would have bought in the past that I have refrained from buying because it's not in the budget and because I have a goal to work toward. I plan on saving a portion of my budgeted money each month to buy things for me, and I'll write a post about some of those things in the coming weeks.
Now, to the budget:
Pets - $35.00
- We dropped this budget down to $35 mainly because we no longer have to buy a bag of dog food each month. A bag of food for Kitty lasts a very long time, so we will adjust the budget during the months we have to buy a bag for her. The same is true for liter, as we usually buy it when it's on sale at Costco and we stock up.
- We plan on buying Sam a new bed and some new toys this month with the money.
- Any money at the end of the month gets put into a larger pet fund that would be used for bigger purchases or vet visits.
Clothing - $50.00
- This is a budget item that is a little different from the rest. Sometimes this is used, and sometimes it's not. For example, in October we overspent the budget buying costumes for Halloween, mainly because we didn't think about costumes at the beginning of the month. We use this for any and all clothing purchases.
- What differentiates this from the other categories is that it's a rollover budget. Any money unspent is added to the category for next month. So if we don't spend any money in November, we'll have $100 to spend in December, and so on.
Recreation - $125.00
- This drops from $180 in October since we don't have Halloween and we aren't hosting Wine and Dine. Recreation covers pretty much everything we do for fun. Whether that's buying a Groupon, going to a movie, or going wine tasting, this has us covered. We overspent in October, so this month we'll make a more concerted effort to stay on budget. We'll be helped by having family in town for one weekend and won't be going out and spending money.
Personal - $150.00
- This budget covers our household expenses like toothpaste, dish soap, and the like. It also covers personal wants like boardgames and supplies (for me) and tea cups and books (for Kristi). We use this budget up regularly at Costco buying our supplies in bulk.
- Each month we get a "Personal 25" so that we can buy things we want individually. This helps us in 2 ways: It lets us buy a little something here and there for each of us so we can prevent splurge spending. It also let's us save up for things we want down the road. I want to get a tablet, so in a few months of saving I'll be able to get one. I can easily get one tomorrow, but I'd have to not pay down debt as much to do it, so with the slow trickle of savings I can get something I want without sacrificing our ultimate goal of being debt free.
Food - $400.00
- This, along with our Transportation budget are the two largest budgets. We usually spend about $250-$300 on our food each month since we plan our meals (most of the time) and can buy food in bulk and on sale in order to stay on budget. This budget also covers any food I buy for lunches at work since we have a full kitchen it's super easy to buy a bunch of lunch foods and store it at work to make during my lunch breaks.
- This month we have increased the budget to cover Thanksgiving purchases. Mainly delicious jellied cranberry sauce, not that whole-berry blasphemy. And a turkey, I guess. A big one. For the leftovers.
Transportation - $300.00
- This is our other main budget area. We have been able to cut this down significantly since Kristi started school again since we can carpool to work again which greatly reduces our transportation costs. Softball is over as well which has cut out 1-2 long trips a week out of my driving and saved a lot on the gas budget.
- We also incorporate maintenance and parking into this budget, so sometimes this budget will be four, five, six hundred dollars when we know there is a maintenance need like oil change, new tires, etc.
November Budget Total: $1060
At the end of the month I'll post an accurate breakdown of our expenses and how we stayed on budget. I'm hoping that being out in the open with the budget will help us stay on track, as I really don't want to be writing how we went over budget each month because that won't help us progress towards our debt freedom.
