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.
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.
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.
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 firstname.lastname@example.org. I’d be happy to do what I can to help!
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