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Wednesday, September 18, 2013

Budgeting: the plan for your money

So most of you probably know that making a budget is a good idea, but may be unsure of how you should go about it.

Since I have a somewhat unpredictable income, I like to redo my budget each month at the start of the month. What is important to do is a zero-based budget, or have a plan for every dollar. Whether that is saving, spending or giving. Here's a budget form.

You'll have to look at your own values to decide if there are things that you can do without, or if you can downsize on some things. For example, Eric and I mostly watch things on Netflix and didn't use our cable, so we didn't get cable in our new place. Obviously some things can't change, like rent, utilities or minimum payments on debts.


       Item                  Suggested % of Budget                                % of our budget

Giving                            10-15%                                                    0%
                                                                                                  (we give our time)
Saving                              5-10%                                                    0%
Housing                          25%-35%                                                17%
Utilities                             5-10%                                                    5%  
Transportation                  10-15%                                                 10%
Clothing                             2-7%                                                    0%
Medical/Health                 5-10%                                                  This comes out
                                                                                                      before our
                                                                                                      take home pay
                                                                                                      right now.
Personal (including food)  5-10%                                                 10.01%
Recreation                        5-10%                                                   0%
Debts                                5-10%                                                 ~58%



We did our percentages based on our situation, for one I have a lot of clothes, so I definitely don't need to buy more and we have an emergency fund and have quite a bit of debt so the money is better invested in paying off a debt with a 15% interest rate to have money sitting in an account with a .3% interest rate.

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