My Budgeting Process

The foundation of any financial plan should always be a budget, and yet so many people don't actually sit down every month to make one. I was definitely one of those people before beginning my Total Money Makeover. Each pay period, I would sit down, pay all of the bills that were due until my next pay check, and whatever I had left over was what I had to spend on groceries, personal care, etc. until the next pay check. I found myself in an endless cycle of too much month at the end of my money.

Did you know that 70% of American households live paycheck to paycheck? Did you also know that 50% of American households also make $50k or more (40% of these folks making over $100k) each year? This means that there are people that you walk by on a regular basis that you think are well off and put together that are walking around with the same money troubles as you and me.

In this post, I'm going to walk you through how I budget. This budget is not original by any means and it was actually developed from a template provided by GazelleInTents. They are YouTube vloggers that I follow on a regular basis and really offer a lot of inspiration and motivation, so check them out when you have a moment. I will begin by saying that I have hidden a few rows such as the breakdown of my income (I have a few different income sources), tithes/offerings, and a few personal items that are included in my budget. For the most part, however, what you see below is pretty much the bulk of it.

Every month I begin with the same basic template and add in all of the special items that are going on that month. For bills like my gas and electric, I look back at the previous year's bill to estimate and others are just set expenses that I previously determined a budget I want to stay within range of. Some months I have to adjust my budget in certain areas to have leeway in others, but ultimately, at the end of the month, I will have "zero" dollars left over.

Next all of my debt is lined up and are sorted by due dates. I keep a small grid with my debt snowball next to the debt section of my budget to always have for reference. As you can see from the picture above, I have crossed out the student loan that I was able to pay off previously. This month I am forecasted to pay off two of my smaller debts which you can see are highlighted by the red text. I'm so excited that as of last month I am under six figures in debt!

Finally is the section with the month's miscellaneous expenses and the sinking funds that I will begin to fund in the future. For those of you who don't know what a sinking fund is, essentially it's just a savings account for expenses that you know are going to come up such as holidays, birthdays, car maintenance, etc. Currently I don't have anything in any of my funds, but one which was a leftover balance that I had prior to beginning my makeover and decided to keep there.

For me, the most exciting part of my budget is those last two boxes where I have listed the total debt paid off since I began the program. It's been growing a little every month and I just feel so proud of myself when I see that figure month over month.

Tune in at the end of the month where I will let you know how I have done.