Monday, September 30, 2013

Budgeting 101: part 4



Budgeting 101: part 4

By Keith Bunn Jr.
September 30, 2013

Irregular Budgets

A lot of people who have irregular incomes, think that there is absolutely no way they can do a budget. I mean, how can you make a budget, when you have no idea how much you're going to make that month, right? Wrong! 
If you have an irregular income, you need to live on a budget more than everyone else.

Allocated Spending Plan

What you do if you don't have any other income coming in, except for the irregular income, is you sit down and make a list of everything you need to spend money on for the month you're working on the budget for. Once your list is complete, start placing numbers beside the items listed. Number 1 for the most important item and so on, until you reach the bottom of your list. Now I can help you with the first 5 items on your list... Food, Utilities  Shelter, Transportation, and Clothes. Your Four Walls and a Roof. Most people make enough money to at least pay for those 5 items. When you have gotten as far as your money will take you, you stop. Any items left over either don't get paid right now or you pick up a second job, sell something or take on some overtime to pay extra on those items.

Irregular Income plus Extra

Now, if you have an irregular income plus an extra income coming in, either from a working spouse or extra job, you start your budgets with the portion of your household income that is constant. You write out your budget as I explained in this blog series, once you've gone as far as you can with that income, then you start up your Allocated Spending Plan. This time, your list shouldn't be as long and it shouldn't start with the Four Walls and a Roof. Instead, what you should ask yourself is, "If I had one more dollar, what would I spend it on?" Then you put a one (1) next to that item. Then you ask yourself that question again, "If I had one more dollar, what would I spend it on?" And place a two (2) next to that item. Keep asking yourself that question, until again, you have gotten as far as your money will take you, and stop.

Budgeting isn't the easiest to do at first, if you've never done it. In fact, you're going to make a lot of mistakes in the beginning. That's OK! Keep working on it! It normally takes an average of 90 days before a budget starts to work. There will be items in your budget that you think you don't spend so much on when you really are, and vice versa. That's OK! Adjust those dollar amounts where they have to be.You can do this!!! So keep plugging away and make every dollar count! You'll be glad you did!!

The reason I do this is to give people hope and to try to inspire others. To make them think about their finances, whether they are young or old, so they can win financially.
If you have any questions for me about my posts or if you need help learning how to live on less than you make and creating a budget, you can call me at (616) 454-2046 or e-mail me at cavuscoaching@gmail.com. I’d be happy to do what I can to help! 
You can also find more money news, facts and ideas, on my Facebook and/or Twitter pages. I'd be grateful if you followed me. Thank you!

Monday, September 23, 2013

Budgeting 101: part 3



Budgeting 101: part 3

By Keith Bunn Jr.
September 23, 2013

There are different scenarios of budgeting when you're married and you both bring in a paycheck. Example: you both can get paid weekly and on the same day. One of you can get paid weekly while the other can get paid every 2 weeks. Another way would be that you both get paid every 2 weeks on the same day. And lastly, you both get paid every 2 weeks, but on opposite weeks. Julie and I have done just about all these different ways you can get paid and were still able to get our bills paid and pay down our debt. Here's how we did it.

Paid on the Same Day

If you get paid on the same day, no matter if it is every week or every other week, combine your incomes and place them on the top of your sheet of paper like I described in Budgeting 101: part 2 and work your 4 Walls and a Roof, other bills, envelopes, and Debt Snow Ball. Obviously if you both get paid every 2 weeks on the same day, you'll have only 2 sections on your sheet of paper instead of 4, but it is worked the same way.

One gets Paid Weekly, the Other Every 2 Weeks

This one is fairly simple. Again, you will need to divide your sheet of paper into fourths. If the spouse that gets paid every other week gets paid on the 1st and the 15th, then those weeks you will combine your paychecks and work your plan. The other 2 weeks where there is only one paycheck that week, you write that amount down on your sheet and work your plan as far as your paycheck can go.

Paid Every 2 Weeks, but on Opposite Weeks

Julie and I lived on this pay style for quite some time. If you get paid this way, it really isn't any different than getting paid every week. With the exception of having a different income amount every other payday on your sheet of paper. Just write down what you got paid on that payday and work your plan.

Extra Paydays, Bonuses, and Overtime

For those of you out there that get paid every other week, there is a couple times a year you get an extra payday a month. Don't just blow that money. Have a plan for it! If you are up to your eyeballs in debt, you might want to put most, if not all of it towards your Debt Snow Ball. The same goes for bonuses, and overtime. Have a plan for those too, but don't count on them. Because unlike the extra payday we just talked about, bonuses, and overtime can come and go at anytime.

The reason I do this is to give people hope and to try to inspire others. To make them think about their finances, whether they are young or old, so they can win financially.
If you have any questions for me about my posts or if you need help learning how to live on less than you make and creating a budget, you can call me at (616) 454-2046 or e-mail me at cavuscoaching@gmail.com. I’d be happy to do what I can to help! 
You can also find more money news, facts and ideas, on my Facebook and/or Twitter pages. I'd be grateful if you followed me. Thank you!

Monday, September 9, 2013

Budgeting 101: part 2



Budgeting 101: part 2

By Keith Bunn Jr.
September 9, 2013

Getting Started on Your First Budget

Before we get started, I want to let you know that there is really no bad way to do a budget. There are lots of different forms, programs, and software out there that can help you do your budgets. Some of them are free, while others will cost you some money. The thing you want to remember is that YOU have to do it or with your spouse if you're married. Don't pay someone to do this for you. That is a good way to have costly mistakes sneak into your finances or be ripped off by someone who is just looking to take advantage of you. You have to be proactive about your finances! In this series, I'm going to show you how to do a Zero Based Budget the very basic way... with paper & pencil. This is the simplest way we've found that works for us. Once you get the basics down, you can find whatever works for you.

Singles and Budgets

If you get paid once a week, take a piece of paper and divide it into 4 sections. At the top of each section, write down the dates of each one of your paydays for the month you are going to start in.

 Example 1:



Next, on a different sheet of paper, list EVERYTHING you'll have to pay on or buy for that month and put the dates next to them when they are due. 

Example 2:



Note: The categories highlighted in blue, are your minimums you need to survive each an every day.
The categories highlighted in yellow, are the categories we suggest that you fund using the Envelope System.
The categories highlighted in green, are your giving and savings categories.

Once you have your list made out, go back to the first sheet, the one with the 4 sections, and write what your paycheck is for that first week under the date. Then start paying off what bills you can with the money you got that week. Income minus bills equals balance, and so on.

Example 3:



Now before we go any further, you not only have to pay attention on what bills you're going to pay that week, but you have to have a prioritized system in place also. Meaning, there are certain things that you have to buy or pay on first before you do anything else in your budget. Those things are what Julie and I call the 4 Walls and a Roof. They are Food, Shelter, Utilities  Transportation, and Clothes (highlighted in blue in example 2). These are the things we HAVE to have at the bare bones minimum to survive each an every day. Notice that I didn't mention credit cards, vacations, or spa treatments in the 4 Walls and a Roof. That's because they are NOT a priority. If this is all you can do for that week for whatever reason, that's fine, stop right there. With those 5 things covered, you can live to fight another day.
Now, if you get to the bottom of that week, and you have paid on all you can but still have some money left over, you need to carry it over to the next payday and add it to your next paycheck. You do this for every week except for the fourth week. At the end of that week, your balance should be ZERO. If you do end up with a number other than zero, then you need to go back into your budget and fund a few more things until the end of the month equals zero. That is a Zero Based Budget.

The reason I do this is to give people hope and to try to inspire others. To make them think about their finances, whether they are young or old, so they can win financially.
If you have any questions for me about my posts or if you need help learning how to live on less than you make and creating a budget, you can call me at (616) 454-2046 or e-mail me at cavuscoaching@gmail.com. I’d be happy to do what I can to help! 
You can also find more money news, facts and ideas, on my Facebook and/or Twitter pages. I'd be grateful if you followed me. Thank you!


Monday, September 2, 2013

Budgeting 101: part 1



Budgeting 101: part 1

By Keith Bunn Jr.
September 2, 2013

The Act of doing a Budget

Doing a budget each and every month is key to a healthy financial plan. I don't care how old you are, how much money you make, whether you're a man or a woman, or single or married. If you're struggling with money, that could be the biggest reasons why. 
It was our problem too! For years, we were living paycheck to paycheck. All the money came in and it all went right back out just as fast, sometimes faster! Then we did our first budget and it was like we had a V8 moment when we realized that not only did we have enough money coming in each week to eat, pay our bills, and put gas in the cars to get back and forth to work, but we had a surplus! At first, we felt like we got a raise when we saw the surplus on our budget, but then we started to wonder, "Where'd all that money go?" We had absolutely nothing to show for the amount of money we saw on that sheet of paper, other than having financial stress because we didn't have a plan.
Now we do a monthly budget each and every month, BEFORE the month begins. And because we are now doing a budget, we have to date, paid off just under $71,000 of our debt. It took us a while to do that and we're not done yet, but we couldn't have gotten close to paying off that amount if we didn't do a budget, if we didn't have a plan!

Why People don't do a Budget

I've heard tons of reason why people don't do a budget. The biggest reason I've come across is because the person just doesn't want to do one. They don't want to take the time to do it or they think they won't be able to do the things they like to do if they do one. 
The next reason is that is they just don't know how to do one. Even though writing out a budget is fairly simple, no one sat that person down and said, "This is what you have to do..." So the whole thought of doing a budget is intimidating to them. They didn't want to look stupid so they just wouldn't do one. By the way, that one was me!
Another reason would be just plan fear. Fear that their situation is worst than they thought. They'd see tons of envelopes sitting on their desk or kitchen table and just feel completely overwhelmed, so they would ignore the pile and watch it grow over time.
The last reason I'll list here is that they haven't found any kind of software that best suits their situation. Really? I think that's the worst reason of them all!

Tell Your Money Where to Go

John Maxwell said it best! He said, "A budget is nothing more than telling your money where to go, instead of wondering where it went." I love that quote, and in this series, I will go over how to do a budget. Regardless if your single or have a family, one income or multiple, and even if you have an irregular one, I'll go over what you need to know to start doing a budget and finally start winning with money.

The reason I do this is to give people hope and to try to inspire others. To make them think about their finances, whether they are young or old, so they can win financially.
If you have any questions for me about my posts or if you need help learning how to live on less than you make and creating a budget, you can call me at (616) 454-2046 or e-mail me at cavuscoaching@gmail.com. I’d be happy to do what I can to help! 
You can also find more money news, facts and ideas, on my Facebook and/or Twitter pages. I'd be grateful if you followed me. Thank you!