Budget Series: Intentional Spending

 

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Okay, I’ve shown you our bare bones budget, now it’s time to make your own.  There are tons of blogs, books, and websites about budgeting, but it can get overwhelming.  I’m not going to try to cover everything, just share what works for my family.  You’ve probably had a moment, at least once or twice where you wondered “Where does our money go?”  because you’ve spent your paycheck and have very little to show for it. 

A budget helps you be intentional with your spending.

Track your spending

Unless you are already very intentional with your spending, you probably waste more money than you realize.  We use a cash envelope system, but for tracking purposes, it’s just as well to swipe your bankcard.  Then you’re sure to have a record of expenditures.  See how much money you’re really spending on things like eating out, luxury shopping, entertainment, convenience stores, etc.  The amounts will probably shock you, but it will help you get a starting point for whittling down.

Plan Your Spending

Now that you’ve seen where your money is going, start to plan where your money is going.  Instead of being blown about by your financial state, drive it instead.  That is the freedom of a budget.

  1. Make a list of expenses.  The first thing you need to do is make a list of monthly expenses and the due date for each…mortgage, rent, health insurance, car insurance, TV, electric, water, trash pick-up, cell phones, house phone, savings, etc.  After you’ve made that list, see if you can reduce any of these bills.  Tithing isn’t a “bill” but we consider it a necessity, so it’s included at the top of this list.  These bills are the things that we pay through bill pay straight from our checking account.
  2. Use  your paycheck.  Know when you get paid, and use that info to help  your budget work for you, whether you get paid weekly, every other week, twice a month, or monthly.  So often I see people make comments like, “we were broke and then we got our electric bill,”  or “we were broke and then our rent came due.”  I know that sometimes things happen, but if you’re intentional with your spending, you won’t find yourself in that position quite as often.  My husband gets paid twice a month on the 15th and the 30th.  The majority of our bills (including our mortgage and car insurance) come due at the first of the month, so out of our 30th check.  That wasn’t working for us, so I divided them all out so that it’s fairly even, even though that means some things are paid early, or written down in our check register early.  But, the bills get paid first, so there is no stressing about it later. 
  3. Make your list of spending categories.  After you have all your bills, you’ll know how much money you have to work with for your other spending areas.  This is one useful thing that I learned from Dave Ramsey—the envelope method.  Our categories are simple:  Grocery (includes household items like cleaning, personal care, etc.), Misc (includes car repair and other household repairs), Gas, and Spending (includes clothing, entertainment, homeschool needs, gifts, eating out, and anything else we need to purchase).  For these categories, we use case envelopes and when it’s gone, it’s gone.
  4. Be intentional.  Every cent should be accounted for somewhere.  If your budget allows for it, give yourself a small amount of splurge, but work it into your spending categories.  Don’t allow yourself to waste money without knowing where it’s going.

I know a lot of people cringe when they hear the word “budget,” but I actually find it very freeing.  The truth is, you already have a limited amount of money to work with…you can either make it work for you, intentionally, or you can spend your life wondering where all your money went.  I encourage you to be intentional with your spending, even if you don’t make a detailed budget. If you missed it, I shared our bare bones budget earlier in the series.

Any questions?  Any other specific ideas for what worked for you in creating your own budget?  Please leave a comment with your thoughts.

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Other topics in this series:

~Debt Discouragement
~Why Debt-free? (What the Bible says about debt)
~Our Budget (Frugality is necessary)

~Frugal Living (The Grocery Budget)
-Poor is in the attitude, not the bank account.
~Frugal Living (Saving on other expenses)
~Create Your Own Budget
~Our plan to be debt free (including our mortgage!) in about 6-7 years.

(Disclaimer: I am NOT a financial advisor. I am just a mom with a family living on a single income and I want to encourage others that it is possible to live on a tight budget and still have your needs met and be content…and get out of debt! I really hope that our personal budget information will help someone.)

 

Comments

  1. says

    I think lots of folks avoid budgets because they are afraid of what they’ll find. That was where we were. :-( You just have to bite the bullet and do it. The situation exists whether we are willing to face it or not.

    Speaking from experience, once you have a budget, though, it gives you more peace of mind because you know money is set aside for specific items.

    I like to say that just as we have freedom within the framework of our faith, a budget gives us freedom from constantly wondering if things are going to work out.

    • Crystal says

      Kim, that is so true! I definitely feel that our budget gives us more freedom and peace of mind. Thanks for taking the time to comment :)

  2. cynthia says

    Hubby and I have “talked” about getting our finances in order. I am praying over this because he knows its out of control and so do I, yet here we are. I THANK you very much for doing this series! It has helped me tremedously.

    • Crystal says

      Thanks, Kerri. When we started, we were using a bank card almost exclusively…we never had cash in our pockets, so it was easy to just scroll back through a month or 2 and see where our money was going. I just think that is an eye-opening experience. Even though we had to write everything down, we didn’t really put together how much we were spending on stuff until I literally sat down and added up all the money that was spent on vague, unnecessary things (like random walmart trips, eating out, etc.)

  3. says

    Even though we live quite comfortably on two incomes, I still use a budget and a spreadsheet – it makes life some much easier. I have also set up direct debits for our utilities so i never get a large bill – it really makes running the family finances a breeze. All good advice.

    • Crystal says

      Thanks, Joluise! I completely agree that the budget and spreadsheet makes life easier. I would want to do that to keep track of everything even if it wasn’t so tight of a budget :)

  4. Nicole says

    Very helpful post! My husband and I are wanting to start a budget and we have already sat down and wrote down all our bills and the dates they are due and we are working on tracking our spending for a month. My only problem is I’m having a hard time of dividing our bills so that everything is pretty even. I’m not sure why this is so hard for me but I just can’t seem to wrap my head around it and I keep getting frustrated. I would love to get your input. Thanks so much for the post!

    • Crystal says

      Nicole, i don’t have a fantastic system for this, but I just literally sat down with my bills and divided them up (my husband gets paid twice a month). I pay some bills before they are due, since most of our bills have a due date of around the first and there is no way we could pay everything out of one check. So, I have my budget “on paper” where everything adds up, and the expenses are evenly distributed, and each paycheck I set the bills to pay through our online bill pay and subtract out the amounts from our register. For example, my rent is due on the first of the month, but we deduct it from our budget from the 15th prior (August 1st rent gets paid on July 15th, basically).

      For us, this works because I go ahead and subtract out the money when our budget says to and we know it’s gone. I see so many times where people say that they got such-and-such bill in the mail and couldn’t pay it. We didn’t want that to happen, so we plan for our bills and pay some in advance since we know we couldn’t possibly pay all of our first of the month bills from the 30th check. I hope all this makes sense.

  5. Anonymous says

    Thank you so much for sharing this information! Do you have any advice for people whose income varies? I stay home with my kids, and my husband is self employed. We take weekly pay checks, but they can vary from $400-1500, depending on how much he makes. It’s is why I haven’t set up a budget yet. Any suggestions are greatly appreciated!

  6. says

    While I commend you for your spending habits and your frugality, I strongly disagree with tithing being a necessity. You are needlessly wasting 10% of your already "low" income while trying to get out of debt. 10% of the $36,000 your husband makes a year could go a long way in reducing your debt.

    • Crystal Brothers says

      Thank you for sharing your thoughts, but we will have to agree to disagree on this one. We do not in any way consider tithing to be “needlessly wasting” money.

  7. Cori says

    I have enjoyed reading your “get out of debt” series. I also am a stay at home, homeschooling Mom. My question is where/how do you get the curriculum you use? I do not see school or Homeschool listed in your budget. I try to include a small amount each month toward homeschooling, so that it doesn’t all catch up to me at once. Should I not be? Thanks! Again, great article.

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