When I worked in credit cards I always asked customers, jokingly of course, when they asked for their balance, “Are you sitting down?” They always laughed and joked but now I’m in that position. I’m having to actually sit down and deal with my debt.
Budgeting is important. Knowing what you spend in a month before you start budgeting is even more important. If you use cash, obviously, this is going to require more time and attention than if you only use cards and go back to your accounts and see what you purchase and when. I use a mixture of both. I try to use cash when I can and only use my debit card for my bills but there are many times when I don’t manage to meet that expectation. Last month I spend roughly $1900. Most of it on bills and much of it on things that were not necessary. During a 3 pay period month (wonderful March) you feel like you’re on top of the world, you have extra cash to buy stuff. Then the bottom drops out of the boat literally and instead of having money to fall back on you’re still living paycheck to paycheck. So, in my budgeting I am going to start with the most important part, income.
Knowing what your income is on average is necessary. I know exactly what my income is because my bi-weekly pay is always the same. For some people, and believe me I have been there, each week is different. You may work on commission, overtime, less hours than last week or more hours, the possibilities on what can affect your paycheck are endless. Not to mention the taxes that come out, insurance if your company provides it and other factors. My paycheck is going to start having Aflac payments come out of them. So far up til now it’s just been taxes and medical but now, I must deal with the Aflac ducky. Also, I’m expecting a 90 day review the first week of May and that is going to change my pay as there is supposed to be a pay increase, Lord willing. For the moment, I’m going to stick with my income as being $1835 a month.
Now that I know what my income is, I can finally start building a budget. Before I started budgeting I looked at the accounts I owe money on. Credit cards of course. I decided that it was best to consolidate my debt on to two of my cards I don’t use and pay them down monthly. Two monthly payments are much better than 5. Okay 6. It’s much easier to manage. It also gives me a good idea how I can apply any extra money left over.
The list of items in your budget are going to have some things you can’t change the price on, such as rent. However, there are many things on your budget you can cut out or lower and with determination start saving money. One’s I notice in my budget are subscriptions. Some are quite useful like Netflix ($9.99 a month) and Spotify ($9.99 a month). I use both and I enjoy the services they provide. Netflix keeps me from having to pay for cable and Spotify from having to buy music on iTunes. Two that I decided to scrap completely were Audible and Bookishly. Both wonderful but I already have too many books on my kindle (thanks to BookBub) that were free to download and many that I have hardcopy’s off that I haven’t read yet. Let’s face it, I don’t need more books.
Also, I spend a shocking amount on food for my small person. In one month, dining out, coffee and groceries cost me almost $360!!!! That’s unnecessary! Plus, half of that I know is food I’ll never actually eat. So, guess what? Slashed the grocery budget from to $280. Because this is where I spend the most money apart from rent, this is where I plan on focusing most of my energy on ways I can cut down on my grocery bill. Looking at grocery adds and shopping lists are on the agenda for decreasing the grocery budget and minimizing waste. The Hy-Vee 10/$10 sale doesn’t seem so silly when you love Annie’s White Cheddar Mac n’ Cheese which is usually $2.88 a box. Instead of spending $2.88 here and there when I decide I want it by waiting for a sale I saved $18.80 (I tried couponing, I really do not have the patience for it so for right now, not doing it) and I’m saving myself on gas by not having to go to the store just for one item.
The verdict? As it stands my budget for May is $1745. That leaves me $90 to play around with. First stop is groceries and meal planning. Stay tuned to see if I’m successful.