Budget.

It is almost a fowl word in many households. People rationalize their resistance to the budget in many ways. However, there is nothing scary or intimidating about a budget.

Putting it in Writing

Dave Ramsey often says the budget must be “on paper, on purpose”. I agree. Budgetting is essentially putting everything in writing. A basic notebook, calculator and pencil will work. If you are more technologically inclined, then Microsoft Excel, QuickBooks, and other financial software does exist. The key is to pick something that you will actually feel comfortable using and USE it!

Income –

Begin by listing all money that comes into the house. This includes salaries, bonuses, tips, gifted money or found spare change. Every copper coin that comes into your household must be writen down. If you are a single adult, then you are accounting only for yourself. if you have a spouse, children, or other tendents, then their incomes must be recorded.

What MUST be paid

Now that you have on paper or spreadsheet all income that comes into the house, you must begin calculating what MUST be paid. Dave Ramsey often refers to this as “prioritized spending”. Home, food, and utilities must come first. To insure that my family has shelter, the first thing I list in my budget is the payment on our home. Secondly, the second thing on my list is food. We have a family of 4, so I have slated about $100 a week on our grocery budget. Thirdly, we pay our utilities. Every other bill falls somewhere else in the list.

This part is about the barebones minimum. I am not saying that other bills should be ignored, or that this number will not change. This is being real about what is the bare amount that has to be paid, no matter what.

Tweakin’ It – Or the Emergency Budget Committee Meeting

Once you have placed in writing what comes in and what must come out, then things will begin to get hairy. Realize that your first, second, or even third spending plan/budgets will need some tweaking. Let’s say you estimate that your family will only spend $50 a week on groceries, and that come 2 weeks into the month, you are finding it impossible to do. Don’t give up on your budget. Just Tweak it. Look at how you can adjust or sacrifice in one area to give yourself some extra in another. The key to the tweakin’ is in not giving up. My husband & I are in our 4th month of living “on paper, on purpose” as Dave Ramsey says and I suppose we have had about 6 “emergency budget committee meetings” since.

The key is not to give up. Find a system of record keeping (budgeting) that works best for you and tweak it until it becomes second nature. It is the budget that has helped to put my household on track to getting out of all debt.

Links:

Gather Little By Little: “Create a Budget and Follow it”

Christian Personal Finance: “How to Budget”

Bible Money Matters: “Cash Flow Planning (part of Dave Ramsey’s Financial Peace University)”

Station: Fox Business
Time: 8pm, both nights
Event: According to the show that aired 4/25, the episode May 1st will be on Dave Ramsey’s “babysteps”.

Link:
http://www.daveramsey.com/etc/cms/dave_fox_business_network_7703.htmlc