Fresh Budget and Savings
I'm being optimistic that I'll find another child or two to keep in the near future. If not, the savings portion of my budget may be redirected to keeping my business afloat until I do. However, I felt the time had come to work up a fresh monthly budget since I added the new insurance and have my EF. I only had 5 personal goals for the year, and that was the last of the financial goals, so I'm really happy about this.
First the Steps, which are explained in more detail in Chapter 1 of our book.:
Step 1: How much money do I have, and where is it?
Step 2: What is my regular income?
Step 3: What are my regular bills?
Step 4: What other expenses do I have?
Step 5: How much should I save?
Step 6: Do the numbers add up?
Now my personal budget and how I got there. You can read older sample budgets by clicking on budgeting on the tags list.
Step 1: How much money do I have, and where is it?
I currently have $5,005.39 in my Money Market Account, $19.65 in checking, one $50 savings bond (which is older than I realized...2003), $593.79 in an HSA (which is a special pre-tax savings account restricted to medical expenses), $32+ in a coin bank (that I'm thinking needs to be rolled and deposited after the next yardsale...), and about $29 in my wallet (with $20 on reserve for the next weekly spending allowance).
Step 2: What is my regular income?
I'm employed by a corporation of which I am the sole owner and employee (which is a more expensive way to do things, but I did it mainly to educate myself...so much cheaper than an MBA). I currently draw a salary of $1000/mo. After tax and insurance deductions, I net $720.97/mo. For budgeting purposes I'll round that down to $720.
Always round down income.
(Technically, I'm also drawing a piddly amount of interest income from my accounts, but I wouldn't bother adding that into your budget unless it's a significant and fairly regular amount. Otherwise just treat it as padding.)
Step 3: What are my regular bills?
Currently I live with my parents, which is mutually beneficial and cuts down a good bit on the number of bills I have to juggle. I give them $220/mo. for voluntary 'rent' and phone. I pay $36.72/mo for renters and life insurance. I just spent $435.76 for a year of vision and dental insurance. I also tithe $72.10 every month (which isn't exactly a bill, but it's a regular amount I pay out).
Most of these bills are already monthly. To figure out a monthly amount for the vision/dental, I divide $435.76 by 12 to get $36.313333. I'm going to round that up to $37. I'm also going to round my other expenses up to the nearest whole dollar, and then I'll add everything together.
$220 Rent/Phone
$73 Tithe
$37 Renters/Life Insurance
+$37 Vision/Dental
$367 in regular expenses
Step 4: What other expenses do I have?
Again living with family helps reduce the number of expenses I have. So other than medical (and the HSA is my seperate budget for medical.) I have very few other expenses. Sometimes I spend money on personal products or extra food or clothes, because these are so few I lump them in with my entertainment budget and call it "Spending" which I dole out to myself at $20 every Sunday, with an extra $20 on months with 4 Sundays...basically $100/mo.
Normally I save entertainment for Step 5, but the $100/mo has been working well and I see no reason to change that portion of my budget now.
So we'll say I have $100 in other expenses.
Step 5: How much should I save?
$376 + $100 = $476 in total expenses
$720 (income) - $476 (expenses) = $244
Normally I would now divide up the remaining between savings and entertainment, but since I already cover entertainment in my "Spending" allowance, then I'll focus on dividing the savings.
You would not believe how much I've been straining my brain over savings this time around. After a lot of thought, I've decided to dub $150 long term savings. I'm turning 30 next year, and I've got to get something going. I've also decided to keep trickling $5/mo. into my EF, which may seem like an odd thing to do, but I can see a LOT of scenarios where I could suddenly need more in my EF. So I want to keep it growing.
The remainder ($244-$150-5=) $89 will be short term savings. I'm going to give the short term savings one job at a time. It's first job will be to get my checking account back up to $100...I like having a little extra security between me and any over draft or insufficient funds (yes, I'm aware of the new banking regulations). My Wacom tablet seems to have died *sob*, so I may invest in a Bamboo next, after that it'll be time to focus on saving for a new car.
I realize at $89/mo. I'm looking at a long time before I can buy even a cheap car. But I think unexpected income and padding will help me get there faster. Also if it becomes URGENT that I get a car, I'd be okay with dipping into my Emergency Fund, but since it's not, I'm trying to reap the benefits of patience.
Step 6: Do the numbers add up?
At some point during my savings deliberations, I figured that I only had $181 to save each month. I can't remember how I came up with that number. And it is very easy to get your numbers mixed up, particularly when you're dealing with a stack of them.
To recap: Income is $720, my regular expenses are $367, my other expenses are $100, and I'm saving $244 (150+5+89).
$367+$100+$244=711....huh, I lost $9 somewhere. OH, I see. I inverted 367 to 376 in step 5. Silly me.
That actually means I have another $9 to add to my savings. So I'll add it to the $89 for short term to make that $98 (woohoo!) and total savings $253.
$367+$100+$253 = $720
Now my budget is balanced!
If you're new to our blog, and wondering where all those odd cents go from the rounding. It's a very deliberate thing we do called padding. In my case, the padding will go into my checking account until I've met my minimum goals there, then I'll move excess in checking over to a savings account. I'm planning to open a new one to seperate my savings from my Emergency Fund.
First the Steps, which are explained in more detail in Chapter 1 of our book.:
Step 1: How much money do I have, and where is it?
Step 2: What is my regular income?
Step 3: What are my regular bills?
Step 4: What other expenses do I have?
Step 5: How much should I save?
Step 6: Do the numbers add up?
Now my personal budget and how I got there. You can read older sample budgets by clicking on budgeting on the tags list.
Step 1: How much money do I have, and where is it?
I currently have $5,005.39 in my Money Market Account, $19.65 in checking, one $50 savings bond (which is older than I realized...2003), $593.79 in an HSA (which is a special pre-tax savings account restricted to medical expenses), $32+ in a coin bank (that I'm thinking needs to be rolled and deposited after the next yardsale...), and about $29 in my wallet (with $20 on reserve for the next weekly spending allowance).
Step 2: What is my regular income?
I'm employed by a corporation of which I am the sole owner and employee (which is a more expensive way to do things, but I did it mainly to educate myself...so much cheaper than an MBA). I currently draw a salary of $1000/mo. After tax and insurance deductions, I net $720.97/mo. For budgeting purposes I'll round that down to $720.
Always round down income.
(Technically, I'm also drawing a piddly amount of interest income from my accounts, but I wouldn't bother adding that into your budget unless it's a significant and fairly regular amount. Otherwise just treat it as padding.)
Step 3: What are my regular bills?
Currently I live with my parents, which is mutually beneficial and cuts down a good bit on the number of bills I have to juggle. I give them $220/mo. for voluntary 'rent' and phone. I pay $36.72/mo for renters and life insurance. I just spent $435.76 for a year of vision and dental insurance. I also tithe $72.10 every month (which isn't exactly a bill, but it's a regular amount I pay out).
Most of these bills are already monthly. To figure out a monthly amount for the vision/dental, I divide $435.76 by 12 to get $36.313333. I'm going to round that up to $37. I'm also going to round my other expenses up to the nearest whole dollar, and then I'll add everything together.
$220 Rent/Phone
$73 Tithe
$37 Renters/Life Insurance
+$37 Vision/Dental
$367 in regular expenses
Step 4: What other expenses do I have?
Again living with family helps reduce the number of expenses I have. So other than medical (and the HSA is my seperate budget for medical.) I have very few other expenses. Sometimes I spend money on personal products or extra food or clothes, because these are so few I lump them in with my entertainment budget and call it "Spending" which I dole out to myself at $20 every Sunday, with an extra $20 on months with 4 Sundays...basically $100/mo.
Normally I save entertainment for Step 5, but the $100/mo has been working well and I see no reason to change that portion of my budget now.
So we'll say I have $100 in other expenses.
Step 5: How much should I save?
$376 + $100 = $476 in total expenses
$720 (income) - $476 (expenses) = $244
Normally I would now divide up the remaining between savings and entertainment, but since I already cover entertainment in my "Spending" allowance, then I'll focus on dividing the savings.
You would not believe how much I've been straining my brain over savings this time around. After a lot of thought, I've decided to dub $150 long term savings. I'm turning 30 next year, and I've got to get something going. I've also decided to keep trickling $5/mo. into my EF, which may seem like an odd thing to do, but I can see a LOT of scenarios where I could suddenly need more in my EF. So I want to keep it growing.
The remainder ($244-$150-5=) $89 will be short term savings. I'm going to give the short term savings one job at a time. It's first job will be to get my checking account back up to $100...I like having a little extra security between me and any over draft or insufficient funds (yes, I'm aware of the new banking regulations). My Wacom tablet seems to have died *sob*, so I may invest in a Bamboo next, after that it'll be time to focus on saving for a new car.
I realize at $89/mo. I'm looking at a long time before I can buy even a cheap car. But I think unexpected income and padding will help me get there faster. Also if it becomes URGENT that I get a car, I'd be okay with dipping into my Emergency Fund, but since it's not, I'm trying to reap the benefits of patience.
Step 6: Do the numbers add up?
At some point during my savings deliberations, I figured that I only had $181 to save each month. I can't remember how I came up with that number. And it is very easy to get your numbers mixed up, particularly when you're dealing with a stack of them.
To recap: Income is $720, my regular expenses are $367, my other expenses are $100, and I'm saving $244 (150+5+89).
$367+$100+$244=711....huh, I lost $9 somewhere. OH, I see. I inverted 367 to 376 in step 5. Silly me.
That actually means I have another $9 to add to my savings. So I'll add it to the $89 for short term to make that $98 (woohoo!) and total savings $253.
$367+$100+$253 = $720
Now my budget is balanced!
If you're new to our blog, and wondering where all those odd cents go from the rounding. It's a very deliberate thing we do called padding. In my case, the padding will go into my checking account until I've met my minimum goals there, then I'll move excess in checking over to a savings account. I'm planning to open a new one to seperate my savings from my Emergency Fund.