I have been pretty proud of myself for tracking of our expenses. Although I have come to realize that it’s time to step up and lay down the budgeting law. I hope it’s not too late….
Up until recently, I have not known how much we were spending and to where. For that matter, and even more shocking, I have not known how much we were earning and from where. Crazy you say? Yeah, me too.
I began tracking my income and expenses back a few months ago. I called it “Budgeting” because, honestly, it was the closest that I have ever come to actually budgeting anything. What it really was, and still is, is “Tracking”. The act of tracking my expenses and expenditures for the purpose of seeing where things go……and for seeing where I’m failing most.
We learned some cool stuff while performing this exercise. We learned that we spend way too much on Dunkin Donuts for one. Interstingly enough, we learned that despite living in California where the gas prices are higher than most, we don’t spend a lot of money on it. In fact, we spend LESS than we did in Arizona on gas.
We also learned that seemingly every month, we have had some sort of “extra” expenditures that totally throw our financial norms out of whack. We learned that we need to have a fund, or a category in our budget, that covers these crazy expenditures. As I don’t see them ever stopping, at least not while we are still parents. I posted a little about that right HERE.
But that’s where the fun ends. This is where the saving and financial freedom begins.
We have a bunch of debt. This debt ranges from credit cards to car loans to children’s activities and so on. Most of this debt seems to fall on the front half of the month. That would be fine if I got paid all at once at the beginning of the month, for the month, but that’s not the case. So I had to make a plan…….
What I did was total all of our expenses and list who they were and when they were due.
I then identified on what day each of my paychecks hit the bank during this month.
To make it pretty, I color-coordinated the bills with the corresponding paycheck so that I could see what I needed to pay and when.
Then it got ugly. This is the important part, because you have to do math and stuff.
From there I determined how much I would have available from each check. Then I shuffled the bills around so that I could cover all of them before they were due. How did I do that? I’m using a credit card to pay a few of them. But before you freak, hear me out. I then use the last pay check, the one with the most available funds, to pay off the credit card debt that I just rang up. In my case, I actually get points for using the card and I don’t carry any more debt into the next month. Most importantly, everything is paid on time and I still have money left in each check for the usual life expenses, like food and crap.
To be honest, it’s the first month in a very long time that I haven’t just been “winging it” with paying the bills. Because of this whole budgeting thing, we actually have more money to live on each week than we did before. Back when I was just throwing as much money at the bills as I could at the beginning of the month. Now that I have spread it out, we can live better and most importantly, begin paying down the debt. Maybe this budgeting thing is OK after all. Huh? Who knew?
The added benefit to balancing out the bills is that I can balance out the budget. When I was paying as many bills as I could with the first paycheck of the month, it left us with little money for everyday expenditures. That meant that if something came up, like all of a sudden a kid was hungry or something, we may have had to use a credit card to buy food. Budgeting like that seemed impossible, and probably was. I see this as being a new beginning and I’m pretty excited.
Dave
This post may contain affiliate links and by clicking on those links, I may get paid.