Budgets and the process of getting out of debt can suck.
They make you think about what you’re doing with your money. The difficult part is you don’t like to think, and you conveniently don’t have to have a budget to live. The problem is you do have to have a budget if you want to accomplish things worth accomplishing…like getting out of debt.
Creating a budget is simple. Keeping one is hard. Take the income you make in a month and write it down at the top. Then write down all your expenses in a month under that. Your expenses should be much less than your income. You use all leftover to pay down your debt. If you don’t have much left over it’s time to make some changes.
I’ve taken some time to show you a sample of our budget. We’ve cut out most superfluous spending and have tried to get each category’s bills down as low as possible. We also use YNAB to keep track of expenses and hold ourselves accountable. I highly recommend it.
Possible Sample Income: $5000
Rent: $1,100
Giving: $500 10% of income
Utilities
Cell Phone: $70
Internet: $48
Electricity:$112
Water $100
Natural Gas $31
Everyday Expenses
Groceries/Food: $500
Fuel: $150
Household Goods: $50
Baby:$15
Misc. Spending: $50
Rainy Day Funds
Dental Insurance: $39
Car Repairs: $15
Car Insurance: $72
Health Share/Insurance $410
Total Budget: $3,262
Debt payment: $1,738
A couple things you’ll notice at first glance is that we don’t have an entertainment/fun budget.
The reason is because we got into debt by having fun. Having fun that cost money isn’t going to get us out of debt. For example, Amber will tell you the majority of her credit card debt (which is now paid off) was comprised of a cruise, tacos, and beer. I once signed up for a credit card for a free $5 Subway sandwich. Turns out, that’s the most expensive sandwich I’ve ever bought. Credit cards suck, and so does subway.
If we were responsible with our money in the first place we wouldn’t be where we are today. So, for entertainment we find free events to go to. Every Sunday morning we go to Jazz on the lawn which is put on by a local co-op grocery store. They want you to come, get a bite to eat, and listen to jazz. We just skip the bite to eat part and SAVE MONEY.
We also have potlucks at our house, go on the occasional hike, and play ALOT of games. Games are free and allow you to not spend money. They also allow you to spend quality time with friends. Like us playing Catan…
Free activities are key if you’re interested in getting serious about your debt. Another great idea is finding a hobby. One where you can spend a small amount to get started, and don’t have to keep spending money on to have fun. I spent $200 to get climbing gear, and went climbing twice a week on the cliffs in Austin. Now we’ve moved to a place where we can’t climb for free, so I sold my climbing stuff, and put that money directly towards our debt.
Another thing you’ll notice is that we also don’t ever almost never eat out. You don’t go to a restaurant when you’re in debt because restaurant food is way more expensive than cooking at home. It’s harder to plan and prepare food which means you’ll need to do it. If it’s hard you can be sure it’s the right way. When you’re getting out of debt, you can’t afford to pay for convenience like people that are rich and are in debt do. It takes a mature person to tell their friends, “No, we can’t go out to eat with you. Getting out of debt is mature, so welcome to the club.
All money that isn’t spent in the budget is spent paying off debt. I’m in sales, so that fluctuates. We have $17,800 left to go on my college tuition loans.
Is our budget perfect? Of course not. We are track to get out debt by the end of 2015/maybe beginning of 2016.
We go over on the food budget often, get an occasional fast food burger, and sometimes spend money we shouldn’t. The goal here isn’t perfection, it’s being honest with your spending habits.
Love. War.
Things to think about:
-No social media means CRAZY productivity.
-Do you need to agree with everything an organization does to support it?