How are your resolutions going 55 days into the new year?

Mine?

Well some of my “to-do” list was knocked out in January but now it’s time to regroup and refocus on my goals!

One goal of mine is to dominate our budget in 2015! Who doesn’t want to save more this year?! Not to mention our added expenses from baby and a huge house renovation! It’s time to get a good look at where we are, where we are headed and where we want to be.

When was the last time you sat down and analyzed where you were spending your money?

Join me this March! Let’s build better budgets and save more money!

Yes?! You really will join me?! WAHOO!!!

Challenge #1: Getting Started

This part has never been the challenge for me. I love setting up budgets, reviewing spending patterns and playing with excel files (I’m a geek in that way)! The true challenge of budgeting is sticking to the plan! I’ll help you if you help me! We can do it! 🙂

But in the meantime, let’s start the “fun part!”

There are a couple items we need to tackle this week before March begins. So let’s get started!

1. Set Goals

In order to stick to a budget for any length of time, it is necessary to have goals to focus on. Why are you setting a budget? What are your savings goals? Do you have specific or measurable goals for your accounts? Maybe you want to add $300 to your savings each month or find a way to reduce your expenses by $50. Spend some time making a list of your goals. Keep it motivational! You may need it mid-March!

My Goals

• Savings: Keep up our contributions! Dan and I have been religious about putting away some money every month. However, now with baby and house expenses changing, my goal is to find new ways to save money so we can afford the additional expenses without sacrificing our savings contributions.

• Ren: Save more for his future! I know the point of a budget is to set your amounts as exact as possible. However, I find it motivating when I have cash in my pocket at the end of the month! I will strive to spend less in order to have cash leftover at the end of the month and this extra money will be put toward Ren’s savings. He is mommy’s motivation!

• Reduce Expenses: This month I’ll be combing through our expenses to find extra savings that we have overlooked. Maybe we could get a better deal on our cable, I could clip more coupons, or I could finally do some of those DIY projects I’ve been planning! Whatever it may be, I’ll be looking for ways to cut back on spending.

• No Cards: Last but definitely not least, we will not be using our credit cards in March. It is so mindless to swipe and swipe and swipe! Although we pay off our credit cards every month, they have been a growing expense. It’s time to reel it in and put the cards away for awhile. Using a cash envelope system this month will help us to be more mindful of our spending habits.

2. Review Spending Patterns

Alright, now that we have our goals we need to review our spending habits. It’s important to know where you are in order to get where you want to be.

I typically find it helpful to go back three months and take a look at expenses to calculate a good average per category. However, I only took a look back at January and February this time considering our spending habits were much different in the previous months since we were living with my parents, paying for house renovations, and welcoming a new baby to our family. Overall, we still have a lot to learn about our budget and this exercise will come in handy again as the year goes on.

Here is my basic math chart to find your average expenses:

Month 1 expenses + Month 2 expenses + Month 3 expenses = Total  / divide by 3 = Average expenses

Do this by category. Take for example – Groceries:

Grocery Expense Months 1+2+3 = Total for 3 Months / Divide by 3 = Average Grocery Expense

What I reviewed:

January (By Category) + February (By Category)  = Total / 2 = Average Spending Per Category

This is also a good exercise to do with your income if you are not salaried!

Analyze each category to best forecast your category amounts for March. When building a budget, always round up on expenses and down on income. This will help you stay within your means!

3. Construct A Budget

My favorite part > spending! 🙂

Spending on paper that is! Sit down and plan out where every single dollar of your income will go this coming month.

Simply print out this budget planner I made below (IT IS FREE!) or create your own! Plan out your spending based on your expense review. Record your estimated income, plan your savings contributions (always pay yourself first), then subtract fixed expenses and finally move through your variable expense planning. NOTE: “The Future Expense Planning” section is for expenses we pay once or twice a year. Dividing these amounts out month-to-month will help us to delegate and save that money all year long so we can afford those larger expenses at year’s end. 

Keep the budget planner handy all month. As you pay bills, record the true amount in the box under the corresponding payment type. For example, TV/INTERNET may be budgeted for $150. The bill comes in at $139 and you pay with a credit card. Record “$139” in the box under “credit.” This will help you track even better for the following month!

I plan to take certain categories out in cash and use an envelope system to track those dollars. If you want to do the same, simply put a check in the “cash” box next to that category and the amount you are planning to take out of your paycheck. Spend wisely! You have to stretch that amount the entire month!

 

Print your FREE Budget Planning Sheet HERE >>> FreeBudgetPrintableRH

Setting up your budget will take a little time but if it didn’t, it probably would work very well for you. Doing a little research and learning from your history will help you become a better budgeter!

I’ll share a quick tutorial on Friday for making your own cute money envelopes. Because we must save money and look good doing it!

Do you have any tips for building a promising budget?

 

Thanks for joining me in this challenge!

-Lauren