Well, I am adding another "catchy phrase" day on my blog...Frugal Fridays... which I am sure is already taken by someone out there, but I am determined to get some things off my chest about this topic. I like to say that my husband and I have been stuck in the spin cycle in our finances since we got married. It all started when we bought the house (one we couldn't afford but qualified for) and bought the beloved washer and dryer...that was when we got sucked into the laundry pile of people who lose control of their financial situation.
I am NOT making any excuses... firstly because I can't think of any.... we were young and ignorant in money making decisions and we are where we are now because of early spur of the moment decisions, no budgeting and the little rectangles of plastic which I now know are not play money....
About 5 months ago, I read the book by Dave Ramsey called The Total Money Makeover. You can read that blog entry here. I would recommend this book to anyone looking to finally accept responsibility, swallow a little pride, and get in touch with reality over their financial situation.
The book emphasizes the importance of a total budget, meaning EVERY penny is accounted for by the end of the month. Well this was fine and dandy for people who receive steady paychecks, buy for my family situation, it just about drove me insane. The reason I was going crazy is because our income is ever changing and I can't account for money that I don't know is going to be there or not. So I decided to create a Bottom Line Budget.
You can click here
and use it as a guideline for your own, or just use the same one. The Bottom Line Budget lets me know all of the bills I have for the entire month. I decided to put it in the order that they are due, not the order of the biggest bill.
The second portion of the BLB is the money that we have left over after all the bills and expenses are paid. I can then separate it in to categories to decide where I would like it to go. This will help me to get a grasp for that extra money and where it is going. With the budget example that the book gave, I was just waiting until the end of the month to see what I had spent all our money on, and not deciding ahead of time where the money will go.
This way, I can allot cash to all of the non-bill expenses we have - ie- food, gas, etc. and then put all the extra money into the specific categories of my choice. Not sure if this will help anyone else but our family, but I thought it might be helpful for people with similar income situations. Enjoy!!
Note: We are committed to getting ourselves out of the huge debt hole we dug ourselves in. This budget is one of the ways we slowly coming out of debt.