1. Figure out where your money is going.
I got a head start on this step last night. I sat down and went over my last 4 months of bank statements to figure out where the heck all my money is going. It made my stomach turn. I keep a checkbook register faithfully. I check my register against my online banking totals daily. I highlight all of my expenses in different colors...green for checks, blue for transfers, pink for deposits, yellow for debits, orange for cash withdrawls (again, OCD. Don't judge). But until I actually sat down and totaled up how much I spent per month on food, gas, groceries and the like, I had no idea how much of my money was leaving my account. Particularly on eating out. I wish we could have all the money back that we have spent in restaurants. And I'm not even talking nice dinners out where we spend $30 a dinner. No, no...if only it were that easy! It's the McDonald's trips and the gas station Dr. Peppers that add up very quickly. Who notices $2 leaving here and $4 leaving there? You don't....until you sit down and add everything up. It'll shock you.
Now that I know how much I'm spending on things I need and things I don't, I can set a budget. Marty and I took a Dave Ramsey course as newlyweds. It was informative, smart and a great plan for us starting out. But we're both guilty of being lazy when it comes to budgeting. So we didn't. I had an idea of how much I wanted to spend at the grocery or on clothing for the month, but I was always off. To be honest, I didn't really pay much attention to it. No more. I'm setting an entire budget for myself. I know exactly how much I take in a month, how much I take out for bills, and how much I have left. I've set myself a strict budget on groceries. Gas, however, is a different story. Driving back and forth to Bardstown every day adds up. And with these crazy gas prices, it's hard to judge how much I should be spending or how much I should allow myself to spend, because it's not like I can go without gas in my car for a week (unfortunately). If anyone knows any tips on budgeting or saving at the pump, I'm all ears.
3. Allow myself some room.
I have my basics that I'm going to spend money on. Groceries, gas, church tithe and bills. That being said, I will allow myself a budget to spend money on the following things:
- One craft project a month. I will go crazy if I can't craft or do some home improvement projects. Nothing that costs over $50.
- Clothing here and there that help me feel better about myself and help me build a better wardrobe.
- Clothing for Avery as needed. Don't get crazy.
- One breakfast and one lunch out to eat during a two week period. I'm horribly guilty of forgetting my lunch or rushing out the door before breakfast and stopping at McDonald's or the gas station on my way to work or on lunch hour. Pack my lunch, get up earlier to eat breakfast (or fix it the night before).
- Two dinners out a month. Marty and I love to eat out. On payday or when we get a little extra cash, it goes towards dinner. Now, I'm all about date nights out with my husband, but our current spending rate on dinners is ridiculous. Two dinners a month.
4. Put the extra money towards debt reduction and a rainy day fund.
Like the average American, we have a little bit of debt. Nothing huge, by any means, but two car loans and a few store credit cards with fairly low balances. If we pay the minimum amount due on these bills, it'll take years to pay them off. With extra money that is being saved, I will put an allotted amount towards reducing our debt, starting with the smallest bills first. I will also be putting a specific amount from each paycheck into an extra "rainy day" fund. This will be for the big emergencies...the car needs a new battery, Avery needs a new (and stupid expensive) convertible car seat....so when we're in that kind of situation, we won't be borrowing from Peter to pay Paul and paying for it later.
5. Sell the extra.
If you're anything like me, you have a TON of stuff. Stuff that you probably don't even use that often. Solution? Yard sales and eBay. Last week, my mom and sisters and I had a yard sale in my neighborhood. Despite low traffic, I made $46. This week, we're moving the
6. Take on a "part time job."
As nice as a third income would be, a part time job or nightly job just isn't realistic when it comes to having a 9 month old. So, I'm going to paint again. It's an incredible stress reliever (and believe me, I need it) and it made me some money. I'll paint at night when Avery's gone to bed. I cannot wait.
My rules are in place and I can't wait to get started. I'm excited about the money saving possibilities. If you have any great money saving or budgeting tips, send them my way! Let the Penny Pinching Summer begin!