Thrifty tip #4

#4
Create a budget-My husband and I have developed a budget that fits the needs of our family. I believe that one person can not complete a budget on their own. You both need to work together, because you both will be responsible for staying within that budget.

Every two weeks we meet to discuss are budget and pay bills. We meet every two weeks based off of when bills are due and when we get paid. We have a budget for the first and second half of the month. All of our money is pooled into one checking account. The budget changes monthly depending on your needs, so you can not expect to make one budget and it lasts you a full year. When we meet every two weeks we spend at most 30 minutes discussing our budget.

We create categories within our budget. For example, we have a category for car maintenance of 50.00. Every month we write put 50.00 in the car maintenance category of our budget. We do not physically move the money from our checking account, but we allocate the money on paper. We create a tracking sheet for each one of our categories. All of our categories papers are put into a binder. Throughout the 2 weeks when a purchase is made we deduct it from the specific category. This might sound like alot of work, but once it is set up, it is an easy way to keep track of where your money is. Examples of our categories include: mortgage, gas, electric, water, doctor's visit, phone, internet, cable, haircuts, groceries, personal allowance, date night, gasoline, home maintenence, car maintenence, property tax, gifts, clothes.

Why we like this system? Every dollar that you spend is accounted for and has to fit into your budget. When we want to do something, we have to be able to figure out which category the purchase fits in to. This also helps plan for unexpected events so you are not dipping into your savings. For example, we pay property tax every year in December. This bill is usually around 500.00. If we forget about this bill, along with Christmas, we would be pulling money from our savings to pay for our property tax. Instead, we save a portion on paper in our budget to cover this expense.

The other great thing about having a budget is that you are able to save more or pay off more debt. Everything you spend has to fit in your budget, so you have to discipline yourself to not give in to your spending urges.