Creating a Budget

My husband and I are in desperate need of being put on a strict budget. We have two babies and one in elementary and for the next few years, will be living off of one income only. How do you manage your finances and make a fair budget work for you and your significant other? Im looking for details, examples, strategies, helpful resources. TIA

Re: Creating a Budget

what is reasonable for you can only be decided by you.

take a look at how much you've been paying for things. look at old bank statements, etc. this will tell you how much you currently spend in each category.

then you have to take an honest look at each category and decide how much of that you are willing to let go of.

then you have to decide how much effort you want to put into the whole process... are clipping coupons worth it? changing internet providers? screaming at your family to turn things off? raising/lowering the thermostat to not spend so much on utilities?

this will be a PROCESS. you are NOT going to get your budget correct right away.

remember to give yourself room for "fun money." just like a diet, you need to allow yourself a little room for a piece of chocolate every now and again.

if you are carrying debt, i STRONGLY suggest reading Dave Ramsey's book. it will give you an action plan that is basic, easy to follow, and gets results.

finally, if you don't have to go to one income immediately... test it out. put the income of the person who will be staying at home in the bank. don't use it. see how it goes with only one income to count on. this will be a real test without the stress and fear of not having that second income... if you make a mistake, you still have the second income sitting in the bank to clean things up until you get the hang of it.

best of luck to you

Creating a Budget

Make an Excel spreadsheet of EVERYTHING. They have an awesome "Family Budget" template that you can work off of. We did it recently and it's amazing how much we saved in a couple months. Also, give yourselves cash each week to spend and that's it. No debit cards, no credit cards.

Creating a Budget

Dave Ramsey. It sucks but we are doing it now. Also check out ynab. Everyone raves about it. I haven't done it yet as I do everything in excel.

Re: Creating a Budget

We signed up for mint.com and it shows everything We spend . I also read the "we are debt free" board on baby center. Those people make you really create a budget and include all spending categories. I'm finding it tough to even create the budget but we need to. It's based on Dave Ramsey but I think it's great, even if not in debt.

Also , before I left my job we lived on one income for a year. It worked out great but was more difficult than I had originally thought, and went back to work after 5 yrs. the cost of living increased so much in the 5 years I was off (food, healthcare, medical, property taxes) .

Message edited 8/19/2017 9:01:00 PM.

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Thank you every one, very helpful info.

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What are your fixed expenses? (Mortgage or rent, insurance, heating, electric, water, gas, sewer, trash removal, taxes)? What are your flexible expenses, phone, Internet, tv, car, gas, food, etc.

Do you have a car payment? Do you need two cars? Can you trade in for a smaller car with a lower payment? Before buying a car, call your insurance and see how much different cars cost for insurance. Also, a certified pre owned one year old car is usually a better financial bet than a brand new car. Call all of your providers and see if they will give you better rates. Can you drop tv service? Do you want to increase your deductible for a lower cost? Can you bundle services for lower costs? Can you lower your air costs by increasing or decreasing the ten by the time of the year and wearing sweaters?

I think he most important thing to do is to pay yourself first. You are a bill. You must save at least $1000 at first for emergencies. Then three to six months of living expenses. Simultaniously, start investing in your retirement accounts. If you are young, I.e. In your twenties you have time on your side. At first, save to the employer match in your 401k. Then with each raise increase your percentage to max out your 401k. If you are not getting an employer match find a new job with better benefits.

Re: Creating a Budget