The Process of Becoming Financially Responsible

It took awhile before I realized I needed a monthly budget. It originally started out as pieces of scratch paper, and I would budget one paycheck at a time. When your paychecks are only $400 and your rent is $340, that can quickly screw you over.

Now, I have a budget, that I have kept about a year now since my promotion. It's on an Excel Spreadsheet, but I have various versions throughout notebooks to keep readily accessible.

Start off with your base paycheck, no overtime or bonuses. If you have a significant other helping with bills, (which I have had since I moved out, we moved in together after about 4 months of dating), add his/her base check as well. I take my check after taxes, social security and medicare is taken out. I will use my current budget as an example. Mine is $817, and my husband is $622 (after the wonderful child support). Then, I have all of my bills, and the day of the month they are due. The wonderful thing about Excel, is you can have so many different aspects of a single spreadsheet. After I have all of my bills, I then factor in how much I will be spending on our pets, groceries, and gas each check. In our case, it is $185 a pay period total. Take your paycheck dates for the next 6 months to start off, my budget is now over a year, and add them in their own column.

 October 21st             November 4th
$817.00 C pay           $817.00 C pay
$622.00 Z Pay           $622.00 Z Pay
-$185.00 GGP          -$185.00 GGP
-$832.00 mortgage   -$75.00 hycite
-$56.84 Sprint          -$350.00 car
 $365 for savings      -$8.69 Hulu
                                 -$210.00 loan
                                 -$120.00 avista
                                 -$180.00 TBD Com/WSG
                                 $310 left for savings
 
This is just a quick example of a typical monthly payment for me. A few bills aren't listed just because of the way the due date falls. The highlighted green bills are the ones I am paying extra on to pay them off quicker. The payment for the car is $325 a month, but I am paying $350, and when my loan is paid off in two years, I will put the extra $210 towards my car. It's called the snowball effect, and has worked thus far.
We have also set a spending allowance of $20.00 per person, per check, so $80 a month. This cuts back on random spending on things you don't really need. You will quickly learn how much you buy is actually just extra 'stuff'.

This budget helps you remember when bills are due, but more specifically exactly what check they need to come out of, and how much you should have leftover. This was really helpful when planning my wedding, and what I needed to buy as well, and it has been helpful during the home buying process. You can feel free to comment if you have any questions, or would like an example of my spreadsheet!