Bare Bones Budgeting

I started writing this blog about budgeting last night and realized it was getting longer and longer – it’s no wonder a lot of people think budgets are too hard!

So I have included photos of a quilt and an outfit for Miss Berry that I finished over the weekend to help prevent brain overload. I deleted most of my original draft and came up with my bare bones steps of making a budget. Use a spreadsheet program or pen, paper and calculator.

1. Write down everything you spend your money on and sort it into general categories:

Loan Repayments
Rent
Groceries
Utilities
Insurance
Car
Medical
etc, etc, etc

Make sure the totals are for the same period as your pay. If you get paid monthly, divide annual bills by 12, quarterly bills by 3 and so on.

2. Add all the categories up and subtract them from your total income. The figure you get is the amount you have left over. Use this amount to pay off debt or save.

3. At the beginning of each pay period, take the left over amount out of your everyday account and pay off your debt or put it into another savings account – whatever you have decided to do with it.

4. Don’t touch this extra money!

5. At the end of the pay period, take any money in your everyday account and transfer it to debt or a savings account.

6. Don’t spend more than you earn – no exceptions.

That’s it, the very basic, bare bones budget that we are using now. This is by far the easiest and quickest way I have found to budget.

I have been using a personal budget of one kind or another for the last 14 years. Some have been successful and others not so. I have tried numerous tools from hand-written scraps of paper in a diary to a full software program. I have had times when I have been lax, times when the budget has been completely ignored and my spending has been horrific, and times when I have remained on track.

Before you go off thinking I am a saint, let me say that I love spending money! Living simply and frugally is very hard for me and I have times of relapse and spend like I used to. You do not have to be perfectly on track with your budget at all times (although that is the goal). If you have or are thinking about a budget, don't give up just because you might blow it on the first day; it may not ever be easy.

Budgeting is very, very liberating. It is a wonderful feeling knowing how much money you are spending and that you are spending within your means and are in control.