How I Manage Our Money and Budget - My Top Tips and Tools
For me, a big part of intentional living means budgeting each month and knowing where my money is going. Since we started budgeting as a family, we stress about money less. Some days I even feel like we have more money that I thought we should. But it's really that we know where all of it is going each month.
Today I want to share with you exactly how we budget each month and how we have been able to stay debt free (except for our house and cars) by following a budget each month. I will also give some tips on building and emergency fund. Lastly I will share with you some of my favorite money management tools and resources.
Keep in mind the information I will be giving you is based on how I do our budget and our financial situation. I am not a financial advisor or anything like that, this is just what has helped us. This post is NOT sponsored so recommendations within are all my own. If you don't have time to read this entire post now, because it is long, please consider pinning it to read later. This guide has helped us immensely with paying off debt, saving and having extra money to spend and give.
Part I How I Complete our Monthly Budget
Know Your Money.
The first step in Budgeting is to know your money. What I mean by this is you should know your exact monthly income, know your monthly expenses, know your savings and know your debt. Without knowing these things first, you cannot create an accurate budget.
In addition to knowing these things, you also need to know exactly how many bills you have each month, what they are and the dates that they are due. Using a calendar or an app that keeps track of these dates, as well as your paydays is very helpful. I use good old fashion pen and paper as well as an app called BillMinder. I found BillMinder on the app store and I believe it was free. This app has been a budgeting life saver for me.
Make A Written Budget.
After you know your money, you have to make a budget and know where your money is going. I suggest you create a written budget. I learned to use a written budget by going through Dave Ramsey's Financial Peace University Class. Once we sat down and wrote out our budget we saw money we didn't even know we had.
To start your written budget, sit down and write down how much money you make each month. Then list all of your bills and expenses, ALL of them, including how much you spend on groceries, gas, coffee shops, eating out, shopping for clothes etc. You have to know exactly how much you are currently spending and how much you want to spend in each category to make the budget work.
Our budget is broken down like this ($0.00 in place of actual amount not in any particular order) I like to write everything out and see where it is going. You can also find some budgeting forms here on Dave Ramsey's website to make it easy for you if you are a beginner at budgeting.
Once you have your budget in place it is important to try not to deviate from it. For instance, if you give yourself $20 a week for lunch money once that $20 is gone you need to eat PB&J until your next payday. Doing this will help you stay on track. If you find that your bills are more than your income, you should consider cutting back in areas such as entertainment and spending money to ensure the necessities are taken care of.
Dave Ramsey suggests a zero based budget meaning all of your money each month has a name and is going toward something. You shouldn't have any "extra" money that has not been budgeted somewhere when you are finished writing your budget.
I personally like to keep a slush fund of $100 or so incase I messed up the budget somehow or if a bill is higher than usual in a particular month. I don't like to have to touch savings to pay a bill, this helps to keep me from doing that. I want you to note that this post is simply about budgeting and does not address debt which I may write about in a future post. Leave a comment if you want me to.
“Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law. — ROMANS 13:8””
Review Your Budget Often.
I am so over the top that I literally look at my budget almost daily. You don't have to do this, but you should look at how it is going a couple of times a week and monthly for sure. This will help you to see if you are staying on track or whether you need to make adjustments in any areas. Consistency is key, and once you get used to doing a budget, you will see that your money goes a lot further.
Part II How To Build Your Emergency Fund This Month
Anyone who is working on improving their finances and has a goal to be debt free should have an emergency fund. An emergency fund is money that you have set aside for yourself and your family to use in the case of emergency. A new pair of shoes...not an emergency, Starbucks card goes empty...not an emergency, the plumbing in the kitchen bursts and water is flying everywhere...ding, ding, ding...emergency!
Having an emergency fund saved will keep you from having to go into debt by using a credit card in these circumstances. We personally follow the Dave Ramsey plan to manage our finances. Baby Step #1 of his plan is to save $1000 in an emergency fund. We have had our emergency fund saved for a while. If we ever have to use the money from this fund for an emergency, we make sure to build it back up to $1000 as soon as possible.
I want to give you some ideas on How To Build Your Emergency Fund This Month. For the sake of this post, let's say that you are working to build up a $1000 emergency fund. Here are some ideas of how you can add to it this month.
We all have items in our homes that are collecting dust that we no longer use. Clothes, old video games, jewelry and electronics. These are all items that can be sold online or at a garage store to help bring in some extra cash. Even if you sell items for just a few bucks, it is more than you had and something you can add to your emergency fund.
One person's trash can truly be another person's treasure. A few ideas of places to try to sell at Craigslist, pawn shops, consignment stores and some people even use Etsy to sell the clothes thy no longer want but are in great condition.
Get A Side Hustle.
If your schedule allows, getting a side job can help you bring in extra cash fast. Dave Ramsey always suggests that people deliver pizza on the weekends, but if that's not your thing see if you can pick up a weekend shift at your favorite retail store or restaurant. There are a lot of stores that hire just for the weekends, especially during the holidays. This doesn't have to be a permanent thing but just until you can save up your emergency fund.
Eat At Home.
If you and your family eat out often, consider eating at home until you save up your emergency fund. I know for us, a family of four we spend at least $40 when we eat out at a sit down restaurant and no less that $20 if we go to a fast food place. If we did this multiple times a week it could really add up.
Instead of eating out, try recreating your favorite dishes at home. This will not only save you money but it will also keep you from consuming excess calories and fat that is found in a lot of food when you eat out.
I've mentioned this before but, cable, internet, phone service and subscriptions are all things that can be downgraded or paused until you build your emergency fund. I have personally paused several subscriptions and completely cancelled cable years ago. All of these extra debits from your bank account really add up.
Determine how much you are saving from downgrading and have that go into your emergency fund.
Stick To Your Budget.
The last way you can add to your emergency fund this month is to make a budget and stick to it. I kid you not, when we started following a budget and following it strictly we "found" all kinds of money. The money that we were spending nonchalantly and not even realizing was a substantial amount. Once we got our budget under control we were able to add the money we "found" to our emergency fund.
Review Part I again to get started with a written budget. Here are some ways you can stick to your budget and save some money for your emergency fund:
Pack A Lunch Or Eat At Home.
I have personally found that packing my lunch and snacks for work has saved me at least $100 dollars each month. All of the lunches that we grab on the go really add up. If you think about it, each lunch you eat out is a probably around $10 or so. If you do that 5 times a week you are spending $50 each week on lunches and that doesn't include the money you spend if you eat out on the weekends. So, you can see that simply bringing a lunch from home out of your grocery budget can save a lot of cash.
Make A List Before Going Shopping.
Dear Target, OH Target how I love you...but you make me spend too much money so I have to break up with you. This is a letter I have written many times! But seriously I know you all know what it's like to go to the store for one thing and come out with FIFTY!
Well not anymore, from now on we are going to make a list and stick to it! I mean do we really need another pretty notebook to jot down all of our thoughts and ideas from the day? Sticking to a pre-written list of items that fit in your budget will help you save a ton of money this week and over time.
Make Coffee Shop Drinks An Occasional Treat.
I love coffee and tea as much as the next person, but what I don't like is spending more than $5 a cup for a drink. An easy way to save money this week is to make your coffee at home and only get coffee out as a treat. I have a Starbucks in my building where I work. As tempting as it is to go there for coffee and snacks each day I make it a point to only do it once a week.
If you get a basic drink at Starbucks going one time a week, you could save over $20 or more a week CRAZY right? Now that I make coffee at home, I really don't miss getting it from a shop. I actually enjoy drinking my own homemade cup of joe!
So there you have it, some tips on How To Build Your Emergency Fund This Month. If you make these tips a regular part of your lifestyle you could have extra breathing room in your budget in no time.
I want to give you a bonus tip, Start saving for the holidays now! Set a budget of how much you want to spend next Christmas and start saving toward it. This will help you have a stress free (well money wise anyway) holiday season in 2019!
Part III My Top Resources For Money Management
If you couldn’t tell from parts i and ii, I enjoy money management. Saving money, paying off debt, budgeting...I kinda get obsessed with it. Now, there are times when I get off track with my budget or spend a little too much, so I'm not claiming to be perfect in this area. However I do enjoy it and I feel I do pretty well with it and love learning more about the topic.
I specifically enjoy managing the finances in our home and making sure everything is in order and paid on time. We are talking money here btw, not math...money, let me clarify that...haha I'm terrible at math! Anyway, today in this final part, I want to share with you some of my favorite money management resources, hopefully you will find them helpful as well.
All Things Dave Ramsey.
As you may be able tell by the first parts of this post we follow the Dave Ramsey Plan in our home mostly. His website is actually a one stop shop for financial management and planning and I could probably direct you to his site and stop this post here...but I won't ;)
On the Dave Ramsey website you will find tools about budgeting, getting out of debt, saving for retirement and more. He's a little blunt in his delivery but he knows his stuff. Get started with the Dave Ramsey Plan and be on your way to financial freedom today. Get it HERE.
Every dollar is a free budgeting tool created by the Dave Ramsey crew to help you budget each month. I love the app and I use it every month now (some stricter than others).
It is very helpful for seeing exactly where your money is going each month AND where you want it to go. They also have an app for iPhone and android which is great for on the go budgeting.
Rachel Cruze Show (YouTube Channel).
Like I told you guys I'm a little obsessive when it comes to financial management and sometimes I do random YouTube searches about the topic. Rachel Cruze is actually Dave Ramsey's daughter (go figure) but she has her own unique brand that is geared to the younger crowd. She talks about budgeting, saving money, building wealth and family topics. I really like her. Check out her channel, she uploads pretty frequently which I like as well.
I know this is one you may not have expected but I love PayPal (besides the fees). PayPal makes it easy for me to keep track of my business income and keeps me from mixing business and personal. For most of my payments I accept PayPal and use their business features to help me stay on track for tax purposes. I still have a business bank account but I find going through PayPal just gives me a secondary check on what is coming in for business.
Lastly, I know just about everyone has done this, but if not download your banks phone app! Having one makes it so much simpler to check your account. You should be checking your bank account weekly, if not daily to make sure payments have cleared, there are no overdrafts and that there is no fraudulent activity on your account.
I check mine daily...multiple times...Ha I told you I'm obsessive! Anyway I couldn't live without my banking app, best money management tool ever!
Well that’s it! I hope you can use some of these tips for managing your money there is a lot more information on the web about money management and I encourage you to look at it. You work hard for your money, now it’s time to manage it well so you can get the most out of it!