An Easy Budget to make.

Well some of my friends and I were talking about food budgets. And most people said they didn’t know. They didn’t know because they don’t have a budget. We are in some tough times and over 1 year ago I made this budget, it’s not down to the penny – but its close and it works for us.

First thing we did that I strongly suggest, we have 2 bank accounts. One where we receive our paychecks and one we transfer the money into and pay the bills out of that one only. What is left in the first bank account is what we have for food, car gas, house hold supplies, clothing and entertainment and everything else. We do this so that if we forget to write down a purchase and our account goes negative (when you live paycheck to paycheck this happens unfortunately) non of our bills will bounce.

Second thing we have done is pay a partial of every bill on each paycheck. We get paid every week. So I divided all our bills by 4. Each paycheck I deposit ¼ the amount of the bill into the household account. We used our taxes to pay 1 month in full on all our bills and from that point on we put ¼ into the account each time. Its hard to do the switch but worth it in the end. That way you don’t pay rent and have no money left on that paycheck – every paycheck is the same.

Third I round everything up. If a loan payment is $45.15 a month, I pay $50 every month. I am not overpaying so much my family looses food, but I feel good paying more then the min and I am sure it helps a teeny tiny bit. It’s also easier to track in my check book. I find with whole numbers I make mistake’s less often. I round up the amount I transffer into the household account for monthly bills too, and the extra just sits in the Household account, but when we have once a year things come due we have some padding in the account and it wont hurt us too much. An example of a yearly bill is a Costco or Sams Club membership, AAA auto club membership, Car registration and even if you owe on taxes.

Also we never take the household debt card or check book out of the home. So we are never tempted to use it, because it almost always has money in it – since we deposit so often saving up for the due date.

I made up a chart in word … very simple just columns, don’t even need to know excel! Here is what one column might look like … I changed the $ amounts of what we pay, so this is only an easy to follow example.

3/15/09 $1000 Date and check/deposit amount
$100 Tithing
$250 Rent
$30 Water and Power
$25 Phone/internet
$30 House Gas
$25 Car/house insurance
$25 Hubby’s Credit Card
$25 My Credit Card
$50 Hubby’s Student Loans
$130 My Student Loans
$150 Car Loan
total transfer to household account = $840

$25 Co-pays into savings account

Leaving = $135

So with this budget I transfer $865 every time we get paid into the Household account and savings, and then when a bill comes due I sit down and write out the check and I keep the balance in the check book added up correctly. Sometimes it takes people and business awhile to deposit the checks, but I know exactly what I have paid for.

This leaves $135 for food, car gas and any other things we might want.

Most people would not consider putting aside extra each paycheck for co-pays. We have a very high co-pay and would not be able to afford them when they come up if we did not. Also we use the co-pays section for eye and dental exams since we do not have this kind of insurance. Be sure to tell your doctors you are paying cash for the visit and often they charge you less for the visit then they would charge the insurance for the same exam. I don’t put the co-pay money into the household account so it sits away from bill money and we just transfer it back into our food account when we know we are heading to the doctors office. This makes it easy to see what we can afford medically – with out having to subtract it from the household account. There is no money available to save at this time, so it’s a good place for it to wait.

Also if you do not make a lot of money contact your insurance company and see if there is an assistance program to lower your co-pays if you make less then a certain amount. This is usually biased on how many members of your family there are and income.

When we had our 2 year old the insurance paid for everything but $2000. When we got PG we looked at the insurance and how much would be out of our pocket when we went to the hospital. It was $300, but 9 months later they had changed and we were now required to pay 20% of the total hospital bill. This was a shock as we had only been prepared for the $300. We talked to the hospital and had to submit papers for a review board to look at with our finical info, and they chose to write off our 20%. And if they don’t write off because they think you can pay for it, talk to the billing department and they will often work with you up to 6 months worth of payments.

If my easy budget wasn’t easy for you to understand and you really want to know, please comment and I will try again to describe it in a different way. You really need a budget, and this is the easiest one I have ever used.