Monday, July 7, 2014

New Budget Set-up

This has been a CRAZY year. We had our 2nd baby boy
Hudson aka Will's little brother!
last July 13th and bought a new house in April 2014. We did not sell our condo; instead we decided to keep it as an investment property. That is by far the biggest risk I've taken with money, and I have found that I'm pretty risk averse. Luckily it rented out very quickly so we are not having to carry two mortgages for any length of time. Praise God!

Anywho, we have a new baby, a new house, a new college degree (more on that to come) so I figured it was time to sit back down and work-up a new budget. I said yesterday that we fell off the budget wagon and it is time to get back on, so I've been working on different budget templates and ways to figure out what categories we need. Here is a rough draft of what I've come up with so far:

Annual Expenses: I add these up and divide the total by 26. That is how many paychecks I get a year, so that would be the amount that needs to come out of each paycheck toward that specific category. I use one savings account for all of these and keep track on a spreadsheet how much is in it for each category. If I buy gifts then I would deduct it from the "gift" total on my spreadsheet.

Holiday Extras (Christmas decor, Halloween costumes, Easter baskets, etc...)
Home Maintenance (suggested 1-2% of the home's value per year)
Car Maintenance (suggested $75/mo/car to cover tags, tires, oil changes, etc...)

Monthly fixed expenses:

Condo Mortgage & HOA
Car Insurance
Life Insurance
Home Insurance
Cell Phone

Discretionary Expenses: These are things that can change if we need them to but generally are about the same each month for us.

*Household items (cleaning supplies, paper products, light bulbs, etc...)
*Eating out/Entertainment
*Blow money (money that Chris and I each get each month to spend on whatever-the-heck we want)
*Kids blow money

*Notes which categories we take out as cash. Once it is gone it is GONE!


Rental Emergency Fund
Roth IRA
General Savings (we have an emergency fund with money to cover us for several months in case of a job loss or illness that is separate from this savings. This is for larger ticket items like a vehicle, larger vacation, home renovation, etc... Not that we make enough to save large amounts of money into it each month, but a little bit over time will eventually add up to a lot.)
     You may have more, fewer, or different categories than we do. You may have a way that works better for your family to budget your money. The most important part is having a plan and sticking to it! If you don't have a plan in place to reach your goals the likelihood of actually reaching them is slim to none. If you have a plan that you don't follow the outcome will be the same.

     I am constantly revising and editing things like cleaning schedules and budgets to try to figure out what works best for us. Do you have any pointers or things to add? I'd love to hear them.

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